Putting to rest the speculation that the individual mandate may be delayed, yesterday the Treasury Department and IRS issued final regulations regarding the individual mandate under the Affordable Care Act (“ACA”). The individual mandate requires individuals to maintain health insurance (i.e. “minimum essential coverage”) or pay a penalty (i.e. a “shared responsibility payment”).
The final regulations made a few clarifications but largely left unchanged the proposed regulations (released Jan. 30th). Individuals should go into 2014 with the expectation that they will pay the shared responsibility penalty unless they have minimum essential health care coverage.
Changes include the following:
Definitions: • Specifically identifying the terms used in IRC § 5000A, which requires the shared responsibility payment, are the same terms otherwise used in the ACA (e.g. health insurance coverage, health insurance issuer, individual market, and state).
Minimum Essential Coverage: • Clarifying that eligible employer-sponsored plans include plans issued on behalf of an employer. • Modifying the definition of “self-insured group health plan” to be an eligible employer-sponsored plan, regardless of whether the plan could be offered in the large or small group market in a state. • Clarifying (i) that qualified health plans offered through Exchanges are plans in the individual market and (ii) that a plan offered to one specific individual is a plan in the individual market only if the plan is health insurance coverage under the ACA.
Exempt Individuals: • Clarifying that an individual eligible for continuation or retiree coverage because of a relationship to a former