Final Tax Form Broadens Permissable Lapse in Coverage

Yesterday, the Department of Revenue (DOR) posted the revised and final Schedule HC for 2008. This is the form used to report one’s health insurance coverage to monitor compliance with the individual health insurance mandate. Revised draft Instructions will be released in the next week or so. The final Schedule HC contains a number of the editing suggestions the ACT!! Coalition suggested, and we thank DOR for this very public and collaborative process.

The form contains an unexpected and very welcome change: an extension in the permissible coverage lapse period. Under Chapter 58, people are permitted a lapse in coverage of up to 63 days without penalty (which DOR is implementing with a broad and generous approach). In conjunction with the release of the final Schedule HC, the Connector released an Administrative Bulletin explaining the expansion in the permitted lapse time to three months. This change is effective for 2008 only. For those of you interested in reading it for yourself, check out Line 8 of the Schedule HC. Where it previously said if you may be subject to a penalty if you had three or more consecutive months without insurance, it now says four or more.

This shift will benefit consumers who have any difficulty navigating the system or administrative issues enrolling in a coverage program, and we applaud the efforts of DOR and the Connector to be flexible in the continued implementation of the Individual Mandate. ACT!! hopes to continue our discussions with DOR and the Connector to ensure a smooth tax season next Spring.
Lindsey Tucker

About HCFA

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