Obama administration eases enforcement of penalties for those with canceled plans

The U.S. Department of Health and Human Services announced they will scale back penalties for Americans whose policies were canceled amid ongoing technical difficulties with the Heathcare.gov site, according to Time. The administration announced they will allow those customers who received cancelation letters to purchase catastrophic insurance and won’t be subject to monetary penalties in 2014 if they choose not to buy insurance. Under the current mandate, consumers who fail to purchase a healthcare plan for 2014 would have to pay a fine on their 2014 tax return. 

The new exemption is known as the “hardship exemption.”

The move was motivated by the overwhelming number of Americans who purchased plans, or whose existing plans, did not meet Affordable Care Act (ACA) requirements and were automatically dropped from coverage, USA Today reported. 

“The president and I want to do everything we can to ensure that individuals with canceled plans have as many options as possible,” wrote Kathleen Sebelius, HHS secretary, to six lawmakers who inquired about the exemption, according to USA Today. “I agree with you that these consumers should qualify for this temporary hardship exemption, and I can assure you that the exemption will be available to them.”