Effective Date for Individual Mandate Delayed For Some People
On June 26, 2013 the IRS unexpectedly issued a notice that gives individuals who are eligible for coverage under an employer-sponsored health plan, but who have not elected coverage under that plan, until the start of the 2014 plan year to enroll in the plan. Employees (and eligible dependents) who elect employer-provided coverage as of the start of the 2014 plan year will not be required to pay the individual shared responsibility penalty for the months in 2014 that they did not have coverage.
Employees who declined coverage for the plan year that starts during 2013 may still enroll in the exchange as of Jan. 1, 2014 and then move to the employer-sponsored health plan as of the start of the 2014 plan year if they wish to. However, as a result of this new notice, if the employee chooses to wait to obtain coverage through his or her employer until the start of the 2014 plan year the employee will not be penalized.
Employers still have the option to amend their Section 125 plan to allow currently covered employees/dependents to move to the exchange as of Jan. 1, 2014 and/or to enroll in the plan as of Jan. 1, 2014. (Employers considering allowing mid-year enrollment should verify that this is acceptable to their insurer or stop loss carrier.)
Click here for Notice 2013-42.
