The Internal Revenue Service and Department of Health and Human Services released new regulations Wednesday for the individual mandate portion of the Patient Protection and Affordable Care Act. The proposed regulations shed new light on the process the IRS and HHS will take in determining which individuals are subject to the mandate or whether they’re exempt, and whether their insurance coverage is sufficient.

HHS expects only 2% of taxpayers to pay the fine to the IRS for not having insurance. Some of the exemptions to the mandate include those who have Medicare Advantage and those who would have been eligible for Medicaid under the PPACA expansion plan. The fine for not having coverage in 2014 will be $95, and it will increase to $695 by 2016.

“We’ve always said this mandate penalty is not enough,” says Jessica Waltman, senior vice president of government affairs at the National Association of Health Underwriters. “It just isn’t enough money to keep people in our coverage systems for both brokers and the welfare of the American people in the private insurance market and elsewhere. Let alone actually getting people to pay that small amount, it’s just not the way to go.”

Robert O. Smith, president of the National Association of Insurance and Financial Advisors, said in a statement Thursday that the age rating band could “destabilize insurance markets” by forcing some young adults to forgo insurance and opt for the cheaper mandate payment. “Under a gradual tightening of the ratio, younger people would see their premiums rise slowly over a number of years,” he says as an alternative solution.

Waltman points out that the new regulations are welcome, as clarifications to this law can only help brokers prepare for the year ahead: “Most Americans want to follow the law, either paying the penalty or getting coverage some way or another. There is a greater need for agents and brokers now more than ever as the people need guidance.”

Additional regulations are expected in the coming months and Waltman says they’re needed. “For example, it’s unclear if [the IRS] will do a late enrollment penalty. Medicare has something like this and I think unless they do it here, there’s no way to get everyone enrolled,” she says.

The overlap of standards between large employers, small employers and individuals will also continue to evolve and hopefully get resolved, Waltman noted.

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