Your Source for Health Reform

Topic: Penalty



The ACA stipulates that people who do not have coverage must pay a penalty, which is done via their tax return the following year. The penalty started at $95 or 1% of income, whichever is greater, for 2014 and increases every year. There is also a penalty for employers with 50 or more FTE employees who fail to offer affordable coverage to their workers.


1 2

On the IRS Individual Mandate Rules

The IRS released the final rules on August 27, 2013, for the individual mandate and associated “shared responsibility payment.” These rules largely finalize the proposed version of the rules issued earlier in the year, with a few modifications. This preliminary analysis courtesy of Jackson Hewitt Tax Service Inc. summarizes the final rules.

The ACA Individual Mandate and Related Requirements

This August 2014 report from the Congressional Research Service describes the ACA requirement for individuals to maintain minimum essential insurance coverage, which could take the form of eligible employer-sponsored coverage, individual coverage, grandfathered health plans, and federal programs such as Medicare and Medicaid, among others. There are some exceptions to the requirement. (more…)

Federal Rules on Individual Shared Responsibility Exemptions

This June 2013 CMS fact sheet summarizes federal eligibility rules for receiving an exemption from the individual shared responsibility provision. The rules will ease implementation and help to ensure that the shared responsibility payment obligation applies only to the limited group of taxpayers who have ready access to affordable coverage but choose to spend a substantial period of time uninsured. (more…)

Deep Dive Into Employer Rules and Penalties

This March 2013 webinar by GCG Financial covers the rules and penalties for larger employers under the Affordable Care Act.

“Pay or Play” Penalty – Identifying Full-Time Employees

This February 2013 legislative brief from GCG Financial explains how proposed ACA regulations provide guidance on an optional method for identifying full-time employees for purposes of determining and calculating an employer’s potential liability for a shared responsibility payment. It also notes important transition relief is available under the proposed regulations.

GCG Health Care Reform Update

This February 2013 presentation by GCG Financial covers market developments, wellness incentives, and the employer mandate. It is part of the GCG Financial Healthcare Reform Webinar Series

IRS FAQ: Employer Shared Responsibility Provisions

These questions and answers from the Internal Revenue Service on the ACA’s “shared responsibility” provisions, also known as the employer mandate, reflect final regulations issued in February 2014. They explain in detail what the provisions are, when they go into effect, which employers are subject to them, and how the payment amount (penalty) will be calculated.

The Requirement to Buy Coverage

Along with changes to the health insurance system that guarantee access to coverage to everyone regardless of pre-existing health conditions, the Affordable Care Act includes a requirement that many people be insured or pay a penalty. This simple flowchart by the Kaiser Family Foundation illustrates how that requirement (sometimes known as an “individual mandate”) works.

1 2