Enroll by Valentine's Day to Avoid Obamacare Fines

When it comes to Obamacare, the big date we've heard for a long time is Jan. 1, 2014. That's the day the Affordable Care Act takes full effect, requiring most Americans to be covered, or pay a fine.

We've also heard that there's a grace period -- that in this first year, people have until March 31 get covered before the fine will kick in.

But, whoops! It turns out that Mar. 31 date is wrong, the Obama administration confirmed to the Associated Press on Wednesday. In order to have coverage by March 31, you need to enroll by Feb. 15 -- in other words, the day after Valentine's Day -- to avoid the penalty.

Here's why: It takes about two weeks to process applications. Insurance takes effect on the first of the month. You need to enroll by Feb. 15, for the insurance to take effect March 1. Insurance on April 1 is too late, and you will pay the fine.

The Jackson Hewitt tax preparation company first pointed out the wrinkle with the health care law's least popular requirement.

An administration official confirmed it. The official was not authorized to speak publicly and insisted on anonymity. 

Brian Haile, senior vice president for health policy at Jackson Hewitt, said government agencies initially had different interpretations of the enrollment deadline. The Health and Human Services department, which is taking the lead in implementing the law, kept referring to a March 31 deadline. But the Internal Revenue Service, which handles most of the financial aspects, suggested that the deadline had to be in February.

Leave it to the IRS to figure it out.

"There were inconsistencies," said Haile, adding it took several inquiries by Jackson Hewitt over the last few weeks to clear up the uncertainty.

Starting next year, the law requires virtually all Americans to have insurance or face a tax penalty, triggered after a coverage gap of three months. (That's why Apr. 1 is too late to avoid the fine, if that's the day your insurance starts.) The penalty starts as low as $95 for 2014, but escalates in subsequent years. There are exemptions for financial hardship and other defined circumstances.

The purpose of the penalty is to nudge as many people as possible into the insurance pool. That would help keep premiums in check, since the law also forbids insurers from turning away people with health problems.

Haile said an earlier enrollment deadline around Valentine's Day may turn out to be a blessing in disguise for the administration, because it creates a natural opportunity to market to young, healthy people, whose premiums are needed to offset medical costs of older generations.

"When thinking about how to attract young people, a Valentine's Day message may be very salient," he said.

The administration says the deadline is actually Feb. 15, the day after Valentine's Day.

That's close enough that the government might be able to make the pitch work.