a Larkin
Senate Republicans recently approved the repeal of Obamacare’s individual shared responsibility penalty as part of the 2017 reconciliation act. While the tax cut does not repeal the individual mandate itself, it zeros out both the dollar amount and percentage of income penalties imposed by the mandate.
The details of the repeal may be confusing for your clients, so we have put together a resource of talking points to simplify the repeal and what it means, sourced from a recent article from Health Affairs:
Senate Republicans recently approved the repeal of Obamacare’s individual shared responsibility penalty as part of the 2017 reconciliation act. While the tax cut does not repeal the individual mandate itself, it zeros out both the dollar amount and percentage of income penalties imposed by the mandate.
The details of the repeal may be confusing for your clients, so we have put together a resource of talking points to simplify the repeal and what it means, sourced from a recent article from Health Affairs:
- Both houses of Congress have now voted to repeal the Affordable Care Act’s (ACA) individual shared responsibility penalty, effective for 2019, as part of the 2017 tax reconciliation act.
- Individuals remain responsible for having insurance or paying the penalty for the 2017 filing season and for 2018.
- The IRS announced it will reject electronic filings of 2017 tax returns that do not claim coverage or an exemption or include payment of the penalty.
- Important: the individual mandate was not repealed. Section 5000A of the individual mandate provides the legal requirement for individuals to purchase minimum essential coverage even though the penalty for not doing so has been repealed.
- Employers providing “minimum essential coverage” must still report info to the IRS for the covered individuals and provide evidence of coverage to the individual or be subject to penalties if they fail to report.
- Provisions for individuals to apply for exemptions from the mandate (to exchanges or the IRS) are still in place but it’s unlikely that individuals will apply for exemptions after the penalty is repealed in 2019.
- There are two employer mandate penalties that remain in place:
- a penalty imposed on employers who fail to offer minimum essential coverage to full-time employees if any employee receives premium tax credits to enroll in coverage through an exchange, calculated on a per-employee basis for all full-time employees; and
- a larger penalty imposed on employers who offer minimum essential coverage but fail to offer “minimum value” coverage, which applies to each full-time employee who in fact receives premium tax credits for exchange coverage.
- Premium tax credits will continue to keep coverage affordable for consumers with incomes below 400 percent of the poverty level.
- Coverage will continue to be available to all consumers regardless of preexisting conditions.
- Premiums will not depend on health status, and a risk adjustment system will penalize insurers who attract primarily healthy enrollees.
- The remaining eight titles of the ACA remain operative, including provisions closing the Medicare donut hole.
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