Yes, Obama Did Delay the Individual Mandate

Conn Carroll

10/24/2013 11:00:00 AM - Conn Carroll

Yesterday, NBC News created a stir on twitter when it reported, "BREAKING: White House hopes to delay deadline requiring every American to buy health insurance by up to 6 weeks."

White House Deputy Press Secretary Josh Earnest quickly pushed back, tweeting, "NBC is wrong again. Individual mandate timing hasnt changed. Deadline for having insurance is March 31. Was true this am. Is true tonight."

So who is right? NBC News or the White House? A quick look at the facts shows that original NBC report is correct. No matter how the White House wants to spin it, the fact is that President Obama delayed the individual mandate by six weeks, yesterday.

To understand why this is true, you must first understand how Obamacare's individual mandate is enforced. For 2014, Americans who do not purchase health insurance must pay either a $95 fine per adult ($285 per family) or 1% of family income, whichever is greater.

But one does not have to have insurance for 365 days a year to avoid paying the individual mandate fine. Regulations issues by the Internal Revenue Service (the agency charged with collecting the individual mandate fines) allow Americans to go without insurance for up to two months of the year. But, if someone does not have insurance for at least one day in three separate months (January, February, and March for example) then the IRS will asses the individual mandate fine.

So, even though someone might purchase an insurance policy through an Obamacare exchange on March 1, that policy might not take effect until April 1, meaning they would have been uninsured for three months of 2014, and would be subject to the individual mandate fine.

This is why multiple news organization reported before that the real deadline for buying health insurance was February 15, not March 31. Here is the Associated Press from October 9:

You'll have to get coverage by Valentine's Day or thereabouts to avoid penalties for being uninsured, the Obama administration confirmed Wednesday.

That's about six weeks earlier than a March 31 deadline often cited previously.

The explanation: health insurance coverage typically starts on the first day of a given month, and it takes up to 15 days to process applications.

You still have to be covered by March 31 to avoid the new penalties for remaining uninsured. But to successfully accomplish that you have to send in your application by the middle of February. Coverage would then start on Mar. 1.

And here is PBS from October 10:

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.

Yesterday, the White House changed the February 15 date, saying the IRS will give Americans until March 31 to purchase insurance and avoid the individual mandate fine.

So, up until yesterday, the legal deadline for buying health insurance to avoid the individual mandate penalty was February 15. After yesterday, the new deadline is March 31.

You can spin that all you want as a "correction" or "fixing a glitch" or whatever, but the simple fact is the individual mandate deadline has been delayed.