Jan. 31—Federal agencies issued two proposed rules outlining the shared-responsibility provision of the Affordable Care Act (ACA) and laying out guidelines for receiving an exemption.
Beginning in 2014, the ACA requires individuals to have basic health insurance coverage—known as minimum essential coverage—unless they qualify for an exemption or make a shared-responsibility payment when filing a federal income tax return.
Individuals will not have to make a payment if coverage is unaffordable, if they spend less than three consecutive months without coverage, or if they qualify for an exemption for several other reasons, including hardship and religious beliefs, according to a fact sheet from the Centers for Medicare & Medicaid Services (CMS).
The two sets of proposed regulations, issued by the IRS and the U.S. Department of Health and Human Services, outline rules to ensure that shared-responsibility payments apply only to taxpayers who choose to spend a substantial period of time without coverage despite having ready access to affordable coverage. Less than two percent of Americans will owe a shared responsibility payment, according to the Congressional Budget Office.
The HHS-proposed regulations spell out individual exemptions that may be decided on a case-by-case basis for unexpected personal or financial circumstances, such as the following:
- Partial-month coverage would count for the month.
- Payment would be waived for the first part of a coverage gap spanning the end of one year and start of the next, if the months before year-end number less than three months. For example, for a five-month gap that starts in November, no payment would be required for November and December.
The following statutory categories would qualify as minimum essential coverage: employer-sponsored (including COBRA and retiree), Medicare Part A, Medicaid, Children’s Health Insurance Program (CHIP), certain veterans, and TRICARE, as well as coverage purchased in the individual market.
Starting in 2015, individuals filing a tax return for the previous tax year would indicate which family members (including themselves) were exempt from the provision. For each non-exempt family member without coverage, the taxpayer would owe a payment.
HHS and IRS are seeking comments on these proposals. Comments on the Treasury-proposed regulations are due by May 2, 2013, and a public hearing will be held May 29, 2013. Comments on the HHS-proposed regulations are due by March 18, 2013.
Publication Date: Thursday, January 31, 2013