User:Ethanbas/Individual shared responsibility provision

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The individual shared responsibility provision[1] (also called the individual shared responsibility payment[2]) is the official name of the individual mandate imposed by the Patient Protection and Affordable Care Act.

Summary[edit]

Starting January 2014, an individual and his or her family must have at least minimum essential coverage.[1] Individuals may be exempt from health insurance coverage if:

  • The minimum amount they must pay for annual premiums is more than eight percent of their household income,
  • They have a gap in coverage for less than three consecutive months,
  • They belong to a group that is explicitly exempt from participating in the Affordable Care Act,
  • They qualify for an exemption for one of several other reasons, such as a hardship that prevents them from obtaining coverage.

If an individual and his or her family don't have health insurance and don't qualify for any exemptions, they will be required to make the individual shared responsibility payment.[2]

Note that if an individual lacked sufficient coverage for less than three consecutive months during the year, they are not required to make the individual shared responsibility payment.

History[edit]

The Patient Protection and Affordable Care Act signed in 2010 imposed a health insurance mandate to take effect in 2014 On June 28, 2012, the Supreme Court of the United States upheld the health insurance mandate as a valid tax, in the case of National Federation of Independent Business v. Sebelius and thus within Congress' taxing power.

Minimum essential coverage[edit]

Whether health care coverage qualifies as minimum essential coverage depends largely on the type of coverage it is.[3] The majority of coverage people have is considered to be minimum essential coverage. However, coverage providing only limited benefits does not qualify as minimum essential coverage.[3]

The following table is not comprehensive, but does mention some of the more common health care coverage situations, and whether or not they qualify as minimum essential coverage.[3]
Coverage Type Examples Qualifies as Minimum

Essential Coverage?

Employer-sponsored coverage
  • Group health insurance coverage for employees under a governmental plan, such as the Federal Employees Health Benefit program
  • A self-insured group health plan for employees
  • Retiree coverage
 Yes
Individual health coverage
  • Health insurance purchased directly from an insurance company
  • Health insurance purchased through the Health Insurance Marketplace
  • Health insurance provided through a student health plan
 Yes
Coverage under government-sponsored programs
  • Medicare Part A coverage
  • Medicare Advantage plans
  • Most Medicaid coverage
  • Coverage through a Basic Health Program (BHP) standard health plan
 Yes
Coverage that provides limited benefits
  • Coverage consisting solely of excepted benefits, such as stand-alone dental, vision, accident, or disability insurance
  • Medicaid providing only a single service, for example, only providing family planning services
  • Some TRICARE coverage
 No

Coverage exemption[edit]

If an individual or anyone in his or her family claims an exemption from minimum essential coverage, the individual is not required to make a shared responsibility payment. If an individual's gross income is below the tax return filing threshold for a certain year, that individual is automatically exempt from the shared responsibility provision for that year.[4]

Most exemptions are claimed using Form 8965, Health Coverage Exemptions, when filing a tax return. However, certain exemptions must be granted by the Health Insurance Marketplace in advance. This includes coverage exemptions for certain hardship situations and for members of certain religious sects.[4]

The following table shows some types of exemptions available. It also indicates whether the exemption is granted by the marketplace, claimed on a tax return, or both.[4]
Exemptions Granted by Marketplace,

Claimed on Tax Return, or either

Coverage is considered unaffordable Tax Return
Income below the return filing threshold Tax Return
Citizens living abroad Tax Return
Nonresidents Tax Return
Member of Indian Tribe Either
Member of certain religious sects Marketplace
General hardship Marketplace
Resident of a state that did not expand Medicaid Either

Shared responsibility payment[edit]

See also[edit]

References[edit]

  1. ^ a b "Individual Shared Responsibility Provision". www.irs.gov. Retrieved 2016-02-14.
  2. ^ a b "The Individual Shared Responsibility Payment - An Overview". www.irs.gov. Retrieved 2016-02-14.
  3. ^ a b c "Individual Shared Responsibility Provision - Minimum Essential Coverage". www.irs.gov. Retrieved 2016-02-14.
  4. ^ a b c "Individual Shared Responsibility Provision – Exemptions: Claiming or Reporting". www.irs.gov. Retrieved 2016-02-14.
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