The Internal Revenue Service (IRS) and the U.S. Department of Health and Human Services (HHS) may have created a complicated new market for limited-benefit health insurance plans.
The IRS and HHS raised the possibility that the market could spring to life in 2014 Wednesday, when they released final regulations and draft regulations implementing portions of the Patient Protection and Affordable Care Act of 2010 (PPACA).
If PPACA takes effect as written and works as drafters expect, a “shared responsibility” mandate provision will require many employers to provide a minimum level of help with paying for “minimum essential coverage” in 2014 or else pay a penalty.
Another coverage mandate provision will require many taxpayers who can afford health coverage to have coverage or else pay a penalty.
Federal agencies have decided that an employer can satisfy PPACA coverage mandate obligations by providing bare-bones, “bronze-level,” worker-only coverage set up in such a way that a worker’s share of the premiums would amount to less than 9.5 percent of the worker’s W-2 wages from that employer.
An employer need not provide any subsidy for dependent benefits and has no obligation to ensure that a worker will be able to afford the dependent benefits, officials have concluded.
If a “shared responsibility family” shows that dependent benefits are unaffordable, the family can avoid paying the tax penalty that will be imposed on “irresponsible” taxpayers, but the federal government will not give that family any extra help with paying for health coverage, officials said.