Well Whaddya know? There WILL be a Tax Season Special Enrollment Period for (60 thousand or 1.2 million) people after all!!

Yet another development in the Saga of Form 8962:

As you may recall, last year...

  • About 316,000 households that got tax credits paid to them in advance but did not file any return at all last year. Before the healthcare law, many low-income people were not required to file taxes. Now they must do so if they got a subsidy. But if taxpayers don't realize it, that can create mix-ups.
  • Some 976,000 households that got tax credits and filed 2014 returns, but omitted a new form that is the key to accounting for their subsidies. Called Form 8962, it was introduced for the 2015 tax filing season.
  • About 147,000 households that had requested extensions to file their 2014 taxes, but never followed through.

The good news is that the IRS decided to give a one-time pass to those who filed returns but not the new form (IRS Form 8962):

Friday night, a Treasury spokeswoman said that for this year, the IRS will only flag people who do not file a return at all to have their tax credits turned off. Nonetheless, the spokeswoman said it is important for all individuals to file the proper tax paperwork.

I'm not sure if this applies to just the first 316K households noted above or also the 147K who requested extensions; if so, that's 463,000 households who are being "flagged"...which basically means that when these folks returned to HealthCare.Gov or their state-based exchange website and tried to re-enroll for 2016, they should have been told "No Soup for You!" and denied any APTC (Advance Premium Tax Credits) this time around.

Anyone who earns so little that they don't normally file a tax return almost certainly can't afford to pay full price for most exchange policies, so these 463K households were basically SOL for OE3. And remember, a "household" generally means more than one person. The average U.S. household has around 2.5 people, so that's potentially up to 1.2 million people who were enrolled in exchange policies last year but who couldn't re-up for 2016 since they aren't eligible for tax credits.

Well, guess what was just announced?

via Politico Pro:

The Obama administration is creating a special enrollment period for Obamacare customers who couldn't sign up for coverage this year because they failed to file 2014 tax returns and therefore couldn't prove they were eligible for financial assistance.

In order to qualify, individuals must file their 2014 tax returns validating that they were entitled to premium subsidies. The special enrollment period will run through March 31.

I don't see anything about this development listed on HealthCare.Gov's list of Special Enrollment Period Qualifying Circumstances, which makes me think that it was just decided on a few days ago. They didn't mention anything about it during Thursday's media conference call, anyway, so I presume more details will follow this week.

In other words, I have no idea how many people will actually take them up on this offer; many might not hear about it in time, while others may have already made other coverage arrangements. Last year, when a special "Tax Filing Season" SEP was offered for those who allegedly "didn't know" about the tax penalty, only around 214,000 more people signed up; this one may not move the needle much either.

Still, if nothing else, this certainly helps further explain some of the 2.0 million gap between my projection of 14.7 million OE3 enrollees and the 12.7 million actual figure.

Stay tuned...

UPDATE: Hmmm...ok, I forgot about this: According to this story from Peter Sullivan of The Hill, the actual number who lost their tax credit eligibility was only around 60,000 nationally; barely a rounding error.

I'm rather confused by this, actually. If the SEP only applies to 60,000 people, it'd make barely a dent in the total; if it's the full 1.2 million, I could see several hundred thousand more people signing up over the next 2 months. I'll post another update if/when I sort this out...