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Proposed Rule on Exchange Functions: Eligibility for Exemptions; Miscellaneous Minimum Essential Coverage Provisions

February 1, 2013


The Department of Labor, Health and Human Services (HHS) and the Treasury have released a proposed rule which explains the shared responsibility provision and lays out the eligibility rules for receiving an exemption and the process by which individuals can receive certificates of exemption. 


The regulation includes rules that will ease implementation and help to ensure that the payment applies only to the limited group of taxpayers who choose to spend a substantial period of time without coverage, despite having ready access to affordable coverage


Key provisions of the rule include: 

  • Kinds of Exemptions from Individual Shared Responsibility:  The proposed rule outlines the standards and procedures for exchanges to conduct eligibility determinations for granting certificates of exemption from the individual coverage mandate and individual shared responsibility payment.  The proposed rule outlines five exemptions that exchanges may grant:
    • Membership in a health care sharing ministry (may only be granted retrospectively);
    • Incarceration (may only be granted retrospectively);
    • Religious conscience (may be granted either prospectively or retrospectively);
    • Membership in an Indian tribe (may be granted either prospectively or retrospectively); and
    • Hardship, which includes being determined ineligible for Medicaid because the state did not expand Medicaid eligibility to 133 percent of the federal poverty level, and hardship for being eligible for family coverage under an employer-sponsored plan that is determined unaffordable because it is greater than eight percent of household income (may be granted either prospectively or retrospectively).
  • Using the HHS-Created Exemptions Application:  Exchanges must determine eligibility for an exemption "promptly and without undue delay."  However, exchanges will not be able to process exemption applications after December 31 of a given calendar year for that calendar year.  In these instances, exchanges will need to notify the applicant of the process for claiming an exemption through the tax filing process. If an exemption certificate is granted, exchanges will be required to notify the IRS. 
  • Definition of Minimum Essential Coverage:  The proposed rule also expands the definition of minimum essential coverage to include:
    • Self-funded student health plans;
    • Foreign health coverage;
    • Refugee medical assistance supported by the Administration for Children and Families;
    • Medicare Advantage plans;
    • State high-risk pool coverage;
    • Coverage for AmeriCorps volunteers; and
    • Any other coverage as determined by HHS.


 To learn more about this proposed rule, see the attached document. Please know that the information Wellmark is providing is for informational purposes only. These proposed rules are not binding until final regulation has been issued.


We will continue to provide timely information as it becomes available. Additional information on health care reform can be found on


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