Much attention has been paid recently to the delay of the PPACA Employer Mandate. However, that delay did not affect the Individual Shared Responsibility Provision (Individual Mandate) of the Patient Protection and Affordable Care Act (PPACA). Less has been reported on the details of the Individual Mandate. This applies directly to you as an individual, independent of whether or not you are employed or eligible for employer-sponsored insurance. Following are some basic questions and answers.
What is the Individual Mandate?
Beginning January 1, 2014 each individual (all ages, including children) must have minimum essential health coverage for each month or qualify for an exemption or make a payment when filing his or her federal income tax return.
How much is the payment for not having coverage?
The fee for not having coverage is the greater of $95 or 1% of household income for 2014. It will go up in 2015 to the greater of $325 or 2% and in 2016 to the greater of $695 or 2.5%.
When do I pay the fee?
The fee (or payment) is applied on your annual IRS tax return.
What if I purchase insurance after January 1, 2014?
The fee will be assessed for each month not covered or an exemption is applied.
What if Open Enrollment for my employer’s plan is other than January 1?
There is a special transition relief for employer plans that renew mid-year. Eligible employees can sign up during their 2014 open enrollment and not have to pay the fee for the months in 2014 prior to the new coverage.
What if I am between jobs and don’t have coverage?
There is a one-time exemption each year if you are without coverage for less than three consecutive months during the year.
What are the other exemptions?
There are many statutory exemptions, but the most common are for:
- Religious conscience – You are a member of a religious sect that is recognized by the Social Security Administration as opposed to accepting any insurance benefits.
- Indian tribes – You are a member of a federally recognized Indian tribe.
- No IRS filing requirement – Your household income is below the minimum threshold for filing a tax return.
- Hardship – Your state Health Insurance Marketplace/Insurance Exchange has certified that you have suffered a hardship that makes you unable to obtain coverage.
- Unaffordable coverage options – If the minimum amount you must pay for premiums is more than eight percent of your household income.
For more details or for specifics on exemptions, see the IRS site or contact the Xenium Benefits Department at 503-612-1564 or via email at benefits@xeniumhr.com.