1. News Flash: November 4, 2013 - Health and Human Services (HHS) Extends the Individual
Mandate Deadline
The Department of Health and Human Services (HHS) has announced that it is extending the
deadline during the health insurance exchanges initial open enrollment from February 15, 2014
until March 31, 2014, for individuals to timely enroll in the exchanges and avoid the individual
mandate penalty tax.
Because of the time it takes to process an exchange enrollment, under prior guidance an individual
needed to enroll in one of the exchanges no later than February 15, 2014, in order to have health
coverage in effect by the March 31, 2014 deadline in order to avoid the penalty tax. Since the
duration of the open enrollment period implies that individuals have until the end of the open
enrollment period in order to enroll in coverage through the exchanges, HHS determined that it
would be unfair to require individuals to pay a penalty when they signed up after February 15,
2014, but prior to the end of the initial open enrollment period.
As a result, an individual who enrolls in one of the exchanges by March 31, 2014, will not be
subject to the penalty. If the individual signed up during the period February 16, 2014 through
March 31, 2014, the individual may avoid the penalty tax by claiming a “hardship exemption” on
the individual’s federal income tax return filed in 2015. HHS will be providing additional detail
on how to claim this exemption.
Background
Under the Health Care Reform law’s Individual Mandate, taxpayers are required to obtain
minimum essential health coverage for themselves and their dependents. In general, minimum
essential coverage is broad-based health coverage, and includes, among other things, health
coverage provided by an employer or through a government program (like Medicare or Medicaid)
or purchased in the individual insurance market. A taxpayer is required to pay a penalty tax for
each member of the taxpayer’s family who does not have minimum essential coverage. The tax is
$95 (in 2014), $325 (in 2015) and $695 (in 2016) per noncovered family member, with children 18
or under taxed at half those amounts, and there is a limit of three tax assessments per family.
Willis’ National Legal & Research Group will continue to closely monitor developments regarding
all of the health care reform legal provisions affecting employers and will provide timely updates.
The information in this publication is not intended as legal or tax advice and has been prepared
solely for informational purposes. You may wish to consult your attorney or tax adviser
regarding issues raised in this publication.