By Joe Touschner

Months ago, CMS clarified that those who signed up for a qualified health plan by the end of open enrollment would not face a tax penalty for lacking coverage in early 2014, even if their plans were not effective until May 1.  This was necessary since the mandate exemption for a short coverage gap only applies to gaps less than three months long.  Going without coverage for the four months of January through April would otherwise have triggered a penalty.

While that clarification was welcome, it applied only to people who enrolled in a qualified health plan.  Kids enrolling in CHIP, however, could have faced the same issue—if they applied for coverage toward the end of March, in many states their new coverage would not be effective for several weeks.  Appropriately, CMS has extended the same reasonable accommodation to types of coverage other than qualified health plans, including CHIP.  Families who applied before the end of open enrollment (including those who received an extension for being “in-line” before April 1) will not face a tax penalty for being without coverage in early 2014.  No application will be required for this mandate exemption, unlike some others.  In fact, anyone with minimum essential coverage effective May 1 or before will qualify for this accommodation.