What is the individual mandate?• Starting January 2014, individuals must maintain minimum essential coverage or otherwise ...
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Individual mandate handout

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Individual mandate handout

  1. 1. What is the individual mandate?• Starting January 2014, individuals must maintain minimum essential coverage or otherwise pay a penaltyAre there any exceptions to the mandate?• Religious conscience exemption (certain faiths)• Incarcerated individuals• Undocumented aliens• Those who can’t afford coverage (required contribution of more than 8% of income)• Individuals with coverage gap of less than 3 months• Hardship situations as defined by the Department of Health and Human Services• Income below the tax filing threshold• Members of Indian TribesWhat is “minimum essential coverage”?• Medicare, Medicaid, CHIP, TRICARE, VA, Healthcare for Peace Corp volunteers• Employer sponsored plans, including grandfathered plans, governmental plans, and small and large group market plans• Individual market plans, including grandfathered plans• Other coverage designated as minimum essential coverage by the Department of Health and Human Services or the Department of TreasuryWhat are the penalties?• Greater of flat dollar amount OR percentage of individual’s taxable income over the income filing threshold• Flat dollar penalties (per individual): • $95 in 2014, $325 in 2015, $695 in 2016 • For dependents under the age of 18: half of regular individual penalty • Cap amount of 300% of flat dollar amount• Percentage dollar penalties (per houshold): • Percentage of taxable income over the tax filing threshold • 1% for 2014, 2% for 2015, 2.5% for 2016• Individual would pay the higher of the percentage penalty or the flat dollar penalty• Generally, penalty amount is capped at amount equal to bronze level average national premium through the state exchanges (amount unknown at this time)How is the penalty enforced?• Penalty is assessed as an income tax liability• There are no criminal penalties, fines, or other liens for those who do not pay• May be charged interest and late fees like other taxesLast updated: 1/29/2013

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