Feds get specific on ACA individual mandate rules


After years of legal wrangling and a showdown in front of the Supreme Court, the federal government has finally begun to implement the Affordable Care Act’s controversial individual insurance mandate.

Starting on Jan. 1, 2014, Americans will have a choice: Buy basic health insurance, qualify for an exemption, or pay a penalty when filing federal income taxes, according to proposed regulations issued Jan. 30 by the Treasury Department and the Health and Human Services Department.

Individuals will be able to meet the requirement to for "minimum essential coverage" through a government-sponsored program, an employer-sponsored plan, an individual health plan, or a grandfathered health plan. HHS also is working on regulations to designate other coverage options, according to the proposed regulation.

Individuals will not have to pay a penalty if they can’t find affordable insurance or if they spend less than 3 consecutive months without coverage. The federal government will offer "hardship" exemptions for individuals who would be eligible for Medicaid under the expansion outlined in the Affordable Care Act (ACA) and who live in states that are not expanding eligibility.

Under the Treasury department proposed regulation, individuals would be considered covered for a month as long as they were covered for a single day in that month.

The federal government also proposes to grant exemptions for people with religious objections, members of Indian tribes, taxpayers with income below the income tax filing threshold, members of a health care sharing ministry, and the incarcerated.

The proposed rules are aimed at ensuring that only a "limited group of taxpayers who choose to spend a substantial period of time without coverage despite having ready access to affordable coverage" will have to pay the penalty, according to an HHS fact sheet.

Based on data from the Congressional Budget Office, HHS officials estimate that less than 2% of Americans actually will be required to pay a penalty.

Comments on the proposed regulation from the Treasury Department are due by May 2. Comments on the HHS proposal are due by March 18. Both proposed regulations reference a public meeting on the proposals to be held on May 29.

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