HHS Issues Final Rule on Individual Mandate Penalty Exemptions
On Wednesday, the Obama administration issued a final rule detailing how individuals could obtain exemptions from penalties for noncompliance with the Affordable Care Act's individual mandate, Modern Healthcare reports (Modern Healthcare, 6/26).
Final Rule Details
Under the 139-page final rule, U.S. residents who are exempt from the penalties include:
- Low-income individuals who cannot afford coverage;
- Undocumented immigrants;
- Indian tribal members and their dependents;
- Individuals who experience a hardship;
- Individuals with a coverage gap of three or fewer months;
- Members of certain religious sects or health care sharing ministries;
- Individuals who are in prison (Adams, CQ HealthBeat, 6/26);
- Low-income individuals in states that have opted out of the Medicaid expansion; and
- Individuals with no plan options in their state's health insurance exchange (Modern Healthcare, 6/26).
The final rule further clarifies the exemption for Indian tribal members to those of Native American descent who are eligible for services through an Indian health care provider. It also lays out a process through which HHS can create a list of health care sharing ministries that are exempt from penalties. The rule also notes that individuals receiving coverage through state high-risk pools and self-funded health plans could avoid a penalty under a one-year transitional period for plans that start before the end of 2014.
The final rule also includes a hardship exemption for dependents of a worker who has been offered affordable individual coverage but cannot afford the cost of family coverage (CQ HealthBeat, 6/26). Observers have noted that the affordability of family coverage is a technical problem in the ACA, because the law defines "affordable" individual coverage -- plans that costs less than 9.5% of a household's income -- but does not delineate affordable family coverage (Modern Healthcare, 6/26).
Further, the rule states that hardship exemptions will be available on a case-by-case basis for individuals who face other circumstances that prevent them from purchasing a qualified health plan. It also notes that hardship exemptions based on the projected affordability of coverage will be valid for an entire coverage year.
Individuals who fail to obtain coverage and do not meet any of the requirements for exemption will pay penalties on their 2015 tax returns (CQ HealthBeat, 6/26).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.