Although the employer shared responsibility requirements have been delayed to 2015, the individual responsibility requirement (also known as the individual mandate) is still scheduled to take effect in 2014. Under the individual mandate, most people residing in the U.S. will be required to have minimum essential coverage, or they will have to pay a penalty. Many individuals will be eligible for financial assistance, through premium tax credits (also known as premium subsidies), to help them purchase coverage if they buy coverage through the health insurance marketplace (also known as the exchange).
Employers may find information on the Individual Mandate helpful, however, employers are not required to educate employees about their individual responsibilities under the Patient Protection and Affordable Care Act (PPACA).
General Information
The individual mandate is effective for most people as of Jan. 1, 2014. However, if the individual has access to minimum essential coverage through an employer, and that employer’s plan operates on a non-calendar year basis, the employee and/or dependent will not have to pay penalties for the months before the start of that plan year.
For 2014 the penalty for an adult is the greater of:
• $95
• One percent of household income above the tax filing threshold
The penalty for a child under age 18 is 50 percent of the adult penalty. The maximum penalty per family is three times the individual penalty. The penalty amount increases after 2014.
The penalty will be calculated and paid as part of the employee’s federal income tax filing.
Coming Up: Who will be eligible for premium subsidies?
