Why A Change in Obamacare Open Enrollment for 2015 Is a Big Deal

The Obama administration released standards for plans for 2015 on Wednesday and one of the tweaks might end up helping scores of families to sign up for health insurance. What's not clear is whether the changes will apply to California.

Originally, open enrollment for 2015 was set to run this fall, from Oct. 15 to Dec. 7. Then the administration moved it from Nov. 15 to Jan. 15 in a move that was widely regarded as politically motivated -- to help shift the bulk of open enrollment (and its likely problems) to conclude after the mid-term elections had wrapped up.

In its announcement Wednesday, the administration changed open enrollment again. It will now run Nov. 15 to Feb.15, at least for those in states using healthcare.gov. More on Covered California in a moment.

Starting with healthcare.gov: This change is good news for the millions of people who might be thinking of something besides health insurance during November and December -- namely holiday shopping.

One company strongly pushing for the change in open enrollment is not a health organization. Jackson Hewitt is a national tax preparation service. Brian Haile, its senior vice president for health policy, says the company has been advocating for extending open enrollment up to the April 15 tax deadline. He says it's not only to avoid the distraction of Christmas shopping, but also to align the sign-up period with the time when many consumers receive tax refunds. It's easier for people to make big purchases -- like health insurance -- whey they "have money in their pocket," he noted.

Haile said that the IRS is estimated to distribute $325 billion in tax refunds between January and March, 2015. More than 75 percent of taxpayers get a refund, he said, and for taxpayers with incomes between $15,000 and $50,000, the average refund is $3,000. Note that the likelihood of being uninsured is also higher in this income group.

In addition, filing taxes is a complex financial and bureaucratic endeavor -- just as applying for health insurance is. If consumers can do both at the same time, so much the better. "Anytime that you allow people to simplify their lives and do multiple transactions at the time they do their taxes, that's good for Americans," Haile said. Tax preparers at Jackson Hewitt are informing clients that they risk having to pay a penalty if they do not have health insurance and helping them understand how to sign up.

But Covered California is not obligated to follow the federal schedule. Anne Gonzalez, a spokesperson with Covered California, said the agency is assessing how open enrollment will be implemented in California.

Anthony Wright, executive director of Health Access, an advocacy group, supports giving consumers more time after the holidays to sign up. "The reality for the majority of people who live paycheck to paycheck is that timing matters, and having something that goes into mid-February means you can get a couple of pay periods in between holiday spending and the deadline for open enrollment."

Haile says he hopes the administration will move open enrollment even later -- up to the tax deadline. He's worried about the uninsured people who will only discover their true exposure to the tax penalty when they file their taxes. If they file their 2014 taxes after Feb. 15, they will have to pay a penalty for 2014 and be too late to enroll in health insurance for 2015, thus locking them into another year's penalty.

The administration announced it will also allow consumers to renew their non-compliant policies for two more years. This action does not apply to California as state law does not permit renewal of non-compliant, non-grandfathered policies.