By Joe Touschner
The Affordable Care Act’s employer responsibility and individual responsibility requirements have been much discussed since the Administration announced its decision to delay reporting and penalties for the employer requirement for a year. The individual responsibility requirement, however, is still on track to go into effect in January and recent rules and guidance from HHS have provided some more details on how the individual mandate will work.
The Administration recently finalized rules that describe who can receive exemptions from the mandate. As I observed when the rules were originally proposed, most people will be enrolled in health coverage that allows them to satisfy the mandate—generally any type of employer-sponsored, individual, or government coverage will qualify. As in the proposal, the final rules establish exemptions from the mandate for many of those who aren’t enrolled in coverage. Among other situations, exemptions are available for children and spouses affected by the “family penalty,” for individuals who would qualify for Medicaid but whose state has chosen not to expand, and for cases where enrolling in coverage would present a hardship.
We learned a bit more about the hardship exemptions because HHS also released guidance that shows how it will approach granting hardship exemptions through federally facilitated Marketplaces. Under the final rules, a hardship exemption is in order when obtaining coverage is not possible due to significant, unexpected increases in essential expenses or would cause the individual to go without food, shelter, or other necessities. In its guidance, HHS gave examples of the circumstances it would consider in granting a hardship exemption. These include becoming homeless, experiencing domestic violence, being evicted or facing foreclosure, the death of a close family member, and other extenuating circumstances. State marketplaces may develop their own list of events or situations to consider.
The final rules and guidance reinforce that penalties for violating the individual responsibility requirement will fall only on those who choose to go without coverage they can afford for an extended period, not on those who have coverage or experience a lapse for good reason.
[Editor’s Note: Read Say Ahhh’s most recent blog on the individual mandate here.]
