All individuals need minimum essential coverage under the Affordable Care Act. Firms, meanwhile, have a duty under ACA’s shared responsibility mandate to offer health insurance to a wide range of employees, with companies of at least 50 full-time employees or equivalents most affected. This can lead to a balancing act of sorts, with employees and employers seeking to be fiscally responsible while complying with the law. And compliance is a major issue; there are financial penalties for both companies and individuals in cases of ACA non-compliance.
As 2016 approaches, and as individuals weigh their health insurance options, a review of what constitutes minimum essential coverage might be helpful, with the IRS providing a helpful thumbnail list of examples of likely approved plans. For starters, employer-sponsored health insurance usually fits the bill, though whether the plan meets the minimum essential coverage standard is subject to a number of established guidelines, including whether the plan is affordable. Individuals can also get approved insurance through Medicare or Medicaid, or through a state-run health insurance marketplace.
Individuals can be exempt from the minimum essential coverage requirement, with some financial hardship circumstances and religious reasons among the factors that can merit an IRS exemption. Taxpayers seeking an exemption must fill out IRS Form 8965, Health Coverage Exemptions.
However, it should be noted that affordability isn’t at all a surefire way for individuals to get out of having health insurance, given that there are numerous ways to obtain coverage as well as a premium tax credit for those who qualify. Ultimately, the question for many individuals will come down to this: what’s the best insurance strategy to pursue, given the plans available and the financial penalties at stake for non-compliance? As Healthcare.gov notes, an individual who did not have health insurance in 2016 will pay the greater of $695 or 2.5 percent of household income.
Companies, of course, have their own coverage decisions to make. And when it comes to helping you make the best strategic insurance decisions for you and your employees, The Plexus Groupe is here to help. Contact us at 847-307-6100 (Chicago), 972-770-5010 (Dallas) or 405-241-9462 (Oklahoma City), or reach out to us via the Web at PlexusGroupe.com.
Center for Consumer Information and Insurance Oversight. “Guidance on Hardship Exemption Criteria and Special Enrollment Periods.” June 26, 2013.
HealthCare.gov. “If you don’t have health insurance: How much you’ll pay.” Accessed November 18, 2015.
Internal Revenue Service. Form 8965, Health Coverage Exemptions. 2015.
IRS.gov. “Individual Shared Responsibility Provision.” July 20, 2015.
IRS.gov. “Minimum Value and Affordability.” June 3, 2015.
IRS.gov. “Questions and Answers on the Individual Shared Responsibility Provision.” April 30, 2015.