New Guidance on Affordable Care Act’s Individual Mandate and Penalty Payments

The Department of Health & Human Services (“HHS”) has issued new guidance, regarding penalty payments if individuals do not have health care insurance as of January 1, 2014.  Generally, the ACA provides that individuals must have health insurance by January 1, 2014, or pay a penalty.  An individual complies with the individual mandate if they maintain “minimum essential coverage” or qualify for a hardship exemption. 

Employees who participate in multiemployer health and welfare plans (aka Union plans) already satisfy the requirements of the individual mandate. So they do not have to worry about these penalties.

But individuals without coverage from their employer or from a government program (like MediCal or Medicare) may now purchase health coverage through a Health Insurance Marketplace (in California, Covered California) to satisfy the requirements of the individual mandate. 

HHS has set the initial enrollment period for the Marketplace from October 1, 2013 through March 31, 2014.  The regulations governing the Marketplaces also provide that if health insurance is purchased from a Marketplace between the 1st and 15th of the month, the coverage will be effective the first day of the immediately following month, but if health insurance is purchased from a Marketplace from the 16th through the end of the month, then coverage is effective on the first day of the second following month. In order to make sure as many people as possible secure health care coverage and do not have to pay a penalty, the new HHS guidance provides that anyone who purchases health care insurance through the Exchange by March 31, 2014 will not have to pay a penalty for the year 2014.   

For more information on the Affordable Care Act and Health Ins urance Marketplaces, please contact your Trust Fund attorney.

By Ezekiel Carder | November 4, 2013

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