INDIVIDUAL MANDATE UPDATE
As you know, the Health Care Reform Law includes the “Individual Mandate” that requires all adults 18 and over to have health insurance if “affordable” coverage is available to them or face financial penalties. Partners Community Benefits has created a fact sheet on the Individual Mandate requirement for calendar years 2008 and 2009. Sample tax forms such as 1099 HC and Schedule HC are included as links in the fact sheet. There is also an Affordability Schedule worksheet that individuals can use to determine if affordable coverage was available to them in 2008.
Phase-In
- For tax filing season 2008, individuals only had to show they had health insurance on December 31, 2007 to avoid the tax penalty of $219.
- For tax filing season 2009, penalties are much higher (up to $912) and accrue for each month individuals didn’t have health insurance in 2008, with some exceptions.
- For tax filing season 2010, an additional requirement begins. Individuals will need to show that as of January 1, 2009, their health insurance coverage offered at least basic standard benefits. This is called “Minimum Creditable Coverage” or MCC.
Penalties for 2009 (2010 Tax Season):
- Individuals with incomes up to 150% of the Federal Poverty Level are not subject to any penalty for non-compliance, as those at this income level are not required to pay an enrollee premium for Commonwealth Care health insurance.
- The Department anticipates issuing an updated penalty schedule for tax year 2010.
- Penalties for married couples who do not comply with the individual mandate rules (with or without children) will equal the sum of individual penalties for each spouse.
Penalties for 2009
Individual Income Category*
150.1-200% FPL
200.1-250% FPL
250.1-300% FPL
Above 300% FPL Age 18-26
Above 300% FPL Age 27+
Penalty
$17/month
$204/year
$35/month
$420/year
$52/month
$624/year
$52/month
$624/year
$89/month
$1,068/year
* Compare individual’s annual family household income to chart immediately below to determine applicable Federal Poverty Level (FPL).
** Yearly penalty amounts listed above based on non-compliance for entire year.Federal Poverty Level – Annual Income Standards 2008
This Schedule reflects the Federal Poverty Level standards for 2008 and will be updated when the 2009 Federal Poverty Level standards are published in February 2009.
Family Size
150% FPL
200% FPL
250% FPL
300% FPL
1
$15,612
$20,808
$26,016
$31,212
2
$21,012
$28,008
$35,016
$42,012
3
$26,412
$35,208
$44,016
$52,812
4
$31,812
$42,408
$53,016
$63,612
5
$37,212
$49,608
$62,016
$74,412
6
$42,612
$56,808
$71,016
$85,212
7
$48,012
$64,008
$80,016
$96,012
8
$53,412
$71,208
$89,016
$106,812
For each additional person add
+$5,400
+$7,200
+$9,000
+10,800
Minimum Creditable Coverage (What it means)
MCC is the minimum amount of health coverage that individuals need to have to avoid penalty for calendar year 2009 (tax year 2010). Starting January 1, 2009, the minimum amount of coverage must include benefits like prescription drugs, preventive and primary care, hospital services, etc. On January 1, 2010, more benefits like diagnostic imaging and screening, maternity and newborn care and radiation and chemotherapy will also be added to the list.
The impact of this should be minimal. According to the State, most residents who have health coverage have plans that meet MCC standards.Also, a majority of employers that provide health insurance benefits offer coverage that meets MCC standards. The Health Care Reform law does not technically require employers to offer plans that are MCC compliant, but the hope is that employers will be pressured to do so if their employees are being penalized on their taxes.
If individuals are unsure about whether or not their plans meet MCC standards, they can check with their employers or their insurance carriers. Health insurance carriers licensed in Massachusetts are required by the State to notify consumers about whether their plans meet these standards.
Health insurance like MassHealth, Commonwealth Care, Commonwealth Choice, Medicare, all meet MCC standards. Health Safety Net (formerly called Free Care) is NOT health insurance and does not meet MCC standards.
This information is updated on our website see www.mghsocialwork.org > Staff Access > Individual Mandate or direct link is: http://healthcare.partners.org/ss/ssframebottom/staffresources/New%20Site/Basic%20Needs/CommonWealthCare/BN_HCC_CommonwealthCARE_main.html#IndivMandate
-From “Health Care Reform- Individual Mandate fact sheet” e-mail, Pragya Rizal, Assistant Manager, Public Payor Policy, Partners Community Benefits, January 20, 2009 and Working Draft For Practitioner and Public Comment - 12/22/08, Personal Income Tax Technical Information Release 09-1, Individual Mandate Penalties for Tax Year 2009, Mass. Department of Revenue, at http://www.mass.gov/?pageID=dorterminal&L=7&L0=Home&L1=Businesses&L2=Help+%26+Resources&L3=Legal+Library&L4=Technical+Information+Releases&L5=TIRs+-+By+Year(s)&L6=2009+Releases&sid=Ador&b=terminalcontent&f=dor_rul_reg_tir_tir_09_1_draft&csid=Ador, retrieved 1/5/09.
1/09