Valentine’s Day and the ACA


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October 22, 2013 – Friends and Colleagues: Re: Valentine’s Day and the ACA.

Last week, I emailed about marriage and health reform. So, today I wanted to write about Valentine’s Day and the ACA. It’s all about love here at Jackson Hewitt!

Indeed, we’ve noticed some interesting chemistry between:

(a) the “short coverage gap” exemption in the final penalty rules, which exempts persons from penalties associated with the individual mandate if their gap is coverage in less than three months; and

(b) the requirement of the exchange marketplaces for an individual to enroll and remit premiums 15 days prior to the first of the month (in order for the coverage to be effective on the first of the month).

As we understand the interaction between these rules, an uninsured taxpayer eligible for the tax credits must have coverage effective by March 1, 2014 to avoid the penalties. To ensure that they have coverage effective on March 1st, taxpayers must enroll in their qualified health plans and pay their premiums by mid-February. Hmmm…..

Might there be potential for some “Valentine’s Day” messaging reminding consumers to sign up by mid-February in order to leverage the short coverage gap exemption — and to avoid the tax penalties? One can only hope. Love may be patient, but our experience is that IRS is not.

We shared our musings with some thought leaders last week who confirmed our hunch – so we wanted to distribute this to a wider audience. We will let you know if the IRS issues a clarification on this point – and we’ll keep our fingers crossed for some memorable marketing!

Lovingly yours,

Brian

* For reference, these requirements are at 78 Fed. Reg. 53646, 53662 (Aug. 30, 2013) (to be codified at 26 CFR § 1.5000A-3(j)(2)) and 77 Fed. Reg. 18310, 18462 (Mar. 27, 2012) (to be codified at 45 CFR § 155.410(c)(1)(ii)), respectively.