By Elise Viebeck - 05/02/14 03:15 PM EDT
People who obtained health plans off the marketplaces after March 31 will not automatically face a penalty under the individual mandate, the Obama administration said Friday.
In a bulletin, the Centers for Medicare and Medicaid Services (CMS) created a temporary hardship exemption for people who purchased coverage that was effective on Thursday of this week or beforehand.
Previously, people with a three-month gap in coverage in 2014 would have faced a penalty of $95 or 1 percent of annual household income. This meant that almost everyone needed to have health insurance by March 31.
But the administration changed this deadline to May 1 for many people who struggled to enroll on the marketplaces.
The CMS reasoned Friday that people seeking health plans outside the exchanges are "similarly situated" to people inside the system and might have been confused by the shifting deadlines.
The decision extends a hardship exemption for all months prior to May 1 for people who had coverage outside the marketplaces on that date. It does not prevent penalties from hitting people later in the year if their coverage lapses.
The CMS also provided a temporary hardship exemption for certain people within civilian national service programs like AmeriCorps.
That move came as part of the agency's decision to create a special enrollment period for people entering and exiting those programs.
The reasons are complicated. AmeriCorps workers generally do not receive an offer of healthcare coverage, and those who do might receive short-term health plans that do not meet ObamaCare's standards.
As a result, the administration said people entering the program would be permitted to enroll in the marketplaces within 60 days of their first day.
Those leaving the program who are losing access to short-term coverage might also enter the marketplaces at that time, the CMS said.
The bulletin also created special enrollment periods for people currently covered by COBRA who did not realize they could enroll in the marketplace.
The same offer was extended to people in individuals market plans that renew outside of the exchanges' official enrollment period.