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IRS Issues Rules on Individual Health Care Mandate

IRS Issues Rules on Individual Health Care Mandate

IRS Issues Rules on Individual Health Care Mandate

The Internal Revenue Service issued final rules this week for the individual mandate of President Barack Obama's healthcare overhaul.

A centerpiece of Affordable Care Act, also known as Obamacare, is a requirement that all individuals carry some minimum health insurance or pay a tax. The new system aims to provide insurance through state marketplaces and subsidies for tens of millions of Americans who lack it.

If individuals choose not to carry insurance, they are subject to a penalty, starting at $95 per person per year or 1 percent of income in 2014, whichever is greater, and eventually reaching $695 per person or 2.5 percent of income by 2016.

The IRS, which is administering parts of the law involving revenue collection, released the final rules spelling out the details of what constitutes minimum essential coverage, and how individuals are responsible for spouses, children and other dependents, among other topics.

The individual mandate is distinct from the employer mandate, which imposes a fee on most large employers that do not offer a minimum level of coverage. The Administration delayed that provision, putting off the effective date until 2015.

Backers of the law say that, unlike the employer mandate, the individual mandate is essential to ensure enough individuals are enrolled in the system to allow the online marketplaces to function.

The IRS rules also said employees getting healthcare coverage from a temporary staffing agency and those receiving coverage through a union-sponsored plan are safe from penalties.

Source:  Reuters News

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