Extension Announced on Health Plans Not Meeting New Law Standards

Health Care iStock_000008194152XSmall

Insurance companies offering plans that don’t meet Affordable Care Act minimum standards will be allowed to continue insuring individual customers on their plans for an additional year.

The announcement, made on Nov. 14 by President Obama, provides a grace period for insurance plans and their customers. Under the Affordable Care Act, insurance companies are required to meet minimum essential insurance requirements for coverage.

Those offering out-of-date private plans that don’t comply with the new law were required to issue cancellation notices to their customers.  Those who received the notices were required to purchase insurance in the Health Insurance Marketplace by the March 31, 2014 deadline.

Now customers with plans that don’t meet the minimum essential requirements under the Affordable Care Act can stay on their existing insurance plan for one more year without being cancelled.

What Does this Mean for Me and My Taxes?

If you were worried about receiving a cancellation notice, you have one more year on your existing insurance and you don’t have to worry about purchasing in the Health Insurance Marketplace to avoid a tax penalty assessed on your 2014 taxes filed in 2015.

What If I Received a Cancellation Notice?

If your insurance was cancelled because it did not meet the new standards under the Affordable Care Act, then your insurer has the option of possibly insuring you for one more year.  It will be up to the state commissioners whether they allow insurers to continue offering out of-date private plans for one more year.

Check back with the blog for more up to date information regarding the health care law.

TurboTax is here to help explain health care reform and how it affects you and your taxes, so that you can make the best decision for your health and finances.

Have specific questions about how this impacts you?  Get  health care answers in our TurboTax community.