Affordable Care Act (ACA) Individual Mandate Notice

This is a reminder regarding insurance coverage in 2014 and the potential impact on your 2014 income tax return. Beginning in 2014, unless you are covered by an exemption, you are required to maintain basic health insurance coverage (known as minimum essential coverage) for yourself and any of your dependents, or pay a shared responsibility payment (also known as a penalty).

The penalty is the lesser of: (1) the greater of a flat dollar amount or a percentage of your household income, or (2) the national average premium for the lowest-level plan providing minimum essential coverage. You must make the shared responsibility payment when you file your federal income tax return for 2014. Married individuals who file a joint return for a tax year are jointly liable for any shared responsibility payment.

You can satisfy the minimum essential coverage and not be subject to a penalty if you and your dependent(s) are enrolled in a qualified health plan offered by an Exchange, a qualified employer-sponsored plan, a government plan such as Medicare, Medicaid or children’s health Insurance program (New MexiKids), or any other health coverage plan that meets the minimum essential coverage.

Exemptions from the payment

You may qualify for an exemption from the penalty for not being insured if:

• You’re uninsured for less than 3 months of the year
• The lowest-priced coverage available to you would cost more than 8% of your household income
• You don’t have to file a tax return because your income is too low
• You’re a member of a federally recognized tribe or are eligible for services through an Indian Health Services provider
• You’re a member of a recognized health care sharing ministry
• You’re a member of a recognized religious sect with religious objections to insurance, including Social Security and Medicare
• You’re incarcerated (either detained or jailed)
• You’re not lawfully present in the U.S.
• You qualify for a hardship exemption (Note: you must have applied and been approved for a hardship exemption)

The above is a very simplified explanation of the individual mandate. If you have any questions, please call our office to schedule an appointment to discuss how this requirement will affect you.

Important note for 2015: Open enrollment on the Health Insurance Marketplace ends February 15, 2015. If you are subject to the mandate and not covered by an exemption, please make sure you register to avoid penalties.