Short version. My dependent daughter went 3 months in 2016 without insurance, through little fault on our part. Can I get the penalty removed? How much will the penalty be on a MAGI of $80,000?
Detailed version. My daughter had health insurance through her employer in 2015. She left here job sometime in late 2015 and the insurance lapsed at the end of Dec. 2015. She went back to college and also became my dependent again, for 2016 as I'm paying well over 50% of here support. We applied to put her on my BCBS policy in Nov of 2015. The highly competent lady we worked with for years had left the company and our agent was new and not nearly as competent and overwhelmed, as this time of year was also ACA registration time. We hounded him to get the paperwork moving, but my daughter ended up going the first 3 months of 2016 without any health insurance. Most of this was caused by the agents delay, but after it finally got to the underwriter, they denied her because of a preexisting condition. Each action got delayed by the agent, and there were daily phone calls which he often didn't answer because he was out of the office. We signed an exclusion and BCBS gave her insurance.
Can I get the penalty removed? How? How much will the penalty be on a MAGI of $80,000?
If she was without insurance through March 31, I don't see a way of avoiding the penalty. If a marketplace had screwed up, there might be an exemption, but you were trying to add her to your policy. Insurance fraud is not an exemption.
(Out of my field:) You might try suing your insurance company or agent; as far as I know, the arbitration clause only starts when you actually get the insurance, not as part of the application. But I am not a lawyer.
As far as I can tell, your penalty might be about $430. I calculate it at as (MAGI - $20600)*2.9%*(3/12) if you are married filing jointly.
Assuming you are filing a joint return and you and your spouse are both under age 65, your shared responsibility payment would be 2.5% X (MAGI - $20,700) X 3/12. MAGI is defined as your AGI plus tax-exempt interest/dividends plus any foreign earned income/housing exclusion plus the MAGI of any dependent in your tax family but ONLY if the dependent has a filing requirement.
I spent 1-1/2 hours on the phone with A BCBS rep, she took me three layers deep into supervisors, in mostly an effort to reset the start date of my daughters policy. It was a no go. The Rep that was helping me, understood my case, in fact I had contact with her when I was pushing to get the policy moved through the process. So she knows all the delays that my incompetent agent caused. She put together a file with lots of details and she tells me there are four filled out applications over three months. One of which he held in his office 28 days and the company returned it, because, she tells me, if they are 7 days old, the application needs to be redone.
How would anyone suggest I use the evidence I have from the BCBS agent to make an argument to the IRS for dropping the fine. It clearly shows I tried to have insurance. I have not had my taxes calculated yet, is this something I should just add to my taxes? Should I take it to my local office and plead my case? What is the process.
Thank you very much for the information, I have form 8965 filled out. I also have to two pages documenting the delays by page number of the 49 pages of documents supplied by the insurance rep. I documented 84 days of delay caused by just my agent. I'll mail it Monday.
I received my 1095-B which is a form supplied to the IRS showing if and for how many months you had health insurance for your family members. Mine came with my daughter missing 3 months, Jan, Feb, and Mar. NOTE: There is not a fine if you have less than 3 continuous months of non-coverage, so if she had insurance coverage on March 30, 2016 there would be no fine. I am asking for a hardship exclusion, and have a 49 page file of paperwork from a second tier in the insurance company, this lady was very helpful. The details; My daughter left a job with employer supplied insurance in late 2015 and the insurance terminated Dec, 31 2015. We filled out our [color=red]First[/color] application to have her put back on my non ACA grandfathered policy in late Nov, 2015. My old agent had left the company so I had a new agent. Inconveniently, this is the now the time of year for enrollment in the ACA program. The agent through inexperience and I suspect being over whelmed by ACA applications, did not send my application into the second tier for 31 days. It was rejected as being "stale dated" and not filled out correctly for an add-on. So, we filled out a [color=red]Second[/color] application on 1-7-2016, my daughter now has [b]no[/b] insurance. On 1-19-2016 the application is returned from the 2nd tier to my agent for corrections. On 1-25-2016 the agent is notified he now needs new signatures, because it is again "stale dated". So now on 1-25-2015 we fill out the [color=red]Third[/color] application for insurance. On 1-26-2016 we get a request for medical records. On 2-03-2016 we get a rejection because of a minor medical test issue. On 3-01-2016 after a retest the test problem is cleared and she can be reconsidered for coverage. On 3-03-2016 we fill out a [color=red]Fourth[/color] application. My agent didn't fax it out until 3-08-2016. On 3-08-2016 we got APPROVAL! With an effective date of 4-01-2016 :-( There is more to this, but I calculated 84 days of delay just on my agents account. We tried very hard to get insurance and don't feel any responsibility for the delay, we had dozens of contacts with the agent tryig to get the process moving. We have had coverage with the company since 1999. I suspect the fine to be around $400 and could just pay it, but I don't think I should, so I have filled out a request for exclusion and wrote a two page synopsis of what we did trying to get insurance and how the delay was caused by my agent, all this is supported by the 49 pages from the insurance company. /rant
There is another course of action available. Pay whatever penalties are assessed and separately file suit against the insurance agent who caused these problems. You can also file a complaint with your state's insurance regulation board.
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