Proposed Rule on Shared Responsibility Payment for Not Maintaining Minimum Essential Coverage
February 8, 2013
The Department of Labor, Health and Human Services (HHS) and the Treasury have released a proposed rule which provides procedural and administrative guidance for calculating, reporting, and paying the tax penalty for failure to have minimum essential coverage as required by Internal Revenue Code (“IRC”) § 5000A.
Key provisions of this rule include:
- Coverage for a Month: For any calendar month, an individual is treated as having minimum essential coverage if the individual is enrolled in and entitled to receive benefits under minimum essential coverage for at least one day during the month.
- Liability for Tax Penalties Imposed on Dependents: Taxpayers are responsible for the tax penalties applicable to their dependents claimed on their federal income tax return.
- Joint Liability: If an individual for whom the shared responsibility payment is imposed for a month files a joint return for the taxable year including that month, the individual and the individual’s spouse are jointly liable for the shared responsibility payment. Thus, a spouse can be liable for the payment even if the spouse is exempt from the mandate to maintain minimum essential coverage.
- Exemptions: Generally, an individual is treated as an exempt individual for a month if the individual is an exempt individual for at least one day in the month.
- Exchanges must approve religious and hardship exemptions and will provide certifications on request for exemptions for health care sharing ministries, incarcerated individuals, and members of Indian tribes.
- Income based exemptions must be claimed only on the individual’s federal income tax return for the applicable year.
The IRS also released a set of questions and answers on the proposed rule.
To learn more about this proposed rule, see the attached Q & A and CMS documents. 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 WeKnowReform.com.