It’s still hard to know when, and if, federal regulators will let Patient Protection and Affordable Care Act (PPACA) coverage mandate penalty provisions take effect.
If the Obama administration sticks with the PPACA interpretations it’s announced so far, many consumers who fail to own what the government classifies as minimum essential coverage (MEC) under Internal Revenue Code (IRC) Section 5000A will have to pay a “shared responsibility” penalty equal to 1 percent of their income for the year.
The U.S. Department of Health and Human Services (HHS) and the Internal Revenue Service (IRS) have developed a long list of reasons taxpayers can use to qualify for “hardship exemptions” from the mandate penalty. Avenues for qualifying for a hardship exemption include going to prison, following a religion that objects to insurance, and joining a recognized health care sharing ministry.
To use many of those reasons, a taxpayer must obtain hardship exemption certification from a PPACA health insurance exchange.
Now the IRS has come out with IRS Notice 2014-76, a document that lists deluxe hardship exemption justifications — justifications a taxpayer can use without bothering to get certification from the local exchange.
Your individual health insurance clients may have a hard time using these justifications, but, if they can, they may be able to avoid some paperwork as well as the PPACA individual coverage mandate penalty.
To learn what those justifications are, read on.
1. Family members of a worker who qualifies for affordable individual coverage, but not for affordable family coverage.
The IRS put this in because of a quirk in PPACA and the PPACA implementation regulations.
Regulators say an employer can fulfill its obligations under PPACA to offer affordable coverage with a minimum value by providing coverage set up in such a way that a full-time worker’s share of the self-only coverage premiums costs less than 9.5 percent of the worker’s W-2 wages from that employer.