Individual Mandate

The Individual Mandate Explained (you may just want to print this page out for your records) (*updated 4/9/09)

One key component of this law is the "individual mandate." Beginning on July 1, 2007, Massachusetts residents age 18 and older are required to have health insurance that is deemed affordable to them at their income level or they risk being fiscally penalized on their personal state income taxes. Those not in compliance in 2007 with the mandate lost their personal exemption for their 2007 State Income taxes (estimated at around $200 for an individual).

For the 2008 tax year and beyond, those not in compliance with the individual mandate may be assessed a fine (half the cost of the lowest-cost yearly health care plan deemed available to them). The Department of Revenue (DOR) will be policing this part of the law. It is important to be aware that starting on January 1, 2009, individuals will have to have health insurance that is deemed affordable to them at their income level AND meets "Minimal Creditable Coverage" standards set by the Connector. Please note through the Connector there is a waiver/appeals process from the mandate, MCC requirements, and tax fines.

PLEASE remember that the test is one's ADJUSTED GROSS INCOME for the mandate and one can appeal the fines (the Connector does not make that clear on their website) *

To find your adjusted gross income or what the Connector is calling annual income on their website for the individual mandate, look at the following: For Tax Form 1040- find line 37; For Form 1040A- find line 21; For Form 1040EZ- find line 4.

What are the fines for 2011? How can I find out if insurance is affordable by the state's standards? What is a certificate of exemption from the mandate and how do I get one?

IMPORTANT NEWS FLASH 12/08 -The State is now allowing lapses of coverage of three months or less and you can have multiple lapses of coverage in a tax year!

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The Individual Mandate Explained Special thanks to Chip Joffe-Halpern for supplying the information for this below section. He was on the Connector Board, is board president of Health Care for All, has been enrolling people into health care options for years, and he and his wife are practicing artists.

The Massachusetts health insurance individual mandate guidelines are as follows by Chip:

"Massachusetts Residents filing State income tax forms for 2007 in the winter/spring of 2008 will have to answer a new question on their tax form. For tax year 2007, the question will be: Did you have health insurance on December 31, 2007?

If the answer is "no", then the taxpayer will lose his or her personal State tax exemption (about $200 for an individual) if the individual has had health insurance available to them that is considered affordable at their specific income level by the state.

If the answer is "yes", then proof of coverage will be required (the form that will be issued by employers/insurance companies to individuals to prove they have insurance is being called a 1099 HC form)

In tax years 2008 and beyond (filed winter/spring 2009) MA residents, on their annual tax returns, must demonstrate that they have had health insurance during all months of the previous year, excluding any lapse in coverage of 63 days or less. If unable to do that, filers will face tax penalties.

The penalty in tax years 2008 and beyond may be 1/2 the cost of the most affordable plan as determined by the State. The MA Department of Revenue will assess the penalty for each of the months during which the individual did not have coverage. Coverage will be verified through a database of insurance coverage mandated by a new Health Care Access Bureau located in the Division of Insurance.

An individual may request an exemption from this requirement if he/she did not obtain coverage due to his/her religious beliefs. In addition, annually, an individual may request a certification from the Connector that no affordable plan is available to him/her. The individual may appeal denials of such requests.

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MINIMAL CREDITABLE COVERAGE (MCC) & THE INDIVIDUAL MANDATE

It is important to be aware that starting on January 1, 2009, Massachusetts residents 18 years of age or older will have to have health insurance that is deemed affordable to them at their income level AND meets "Minimal Creditable Coverage" (MCC) standards set by the Connector. It is very important to note that the Minimal Creditable Coverage requirement is being phased in. So for 2007 and 2008, one will only have to prove they have insurance and the insurance does not have to meet MCC standards for those years. There are also exceptions for the MCC requirement- i.e. some people may be exempt from having to have insurance that meets MCC standards in 2009 and beyond. No employer has to offer MCC compliant health plans to their employees. The burden is on an individual to make sure their health care plan meets MCC standards.

If you are exempt from the individual mandate, you will not be mandated by the state to buy health insurance and if you choose to buy health insurance it DOES NOT HAVE TO MEET MCC requirements. So what does this mean? Many self-employed people presently buy their own health insurance and many buy health insurance without drug coverage benefits (due to not needing them). If that self-employed person is exempt from the individual mandate, they will not have to buy health insurance and if they do decide to buy health insurance it will not have to meet MCC requirements (ie they won't have to buy up/purchase insurance that includes drug benefits and/or other MCC requirements).

If you are not exempt from the individual mandate and can not afford a MCC compliant health plan and are not eligible for a State sponsored plan, you can apply for a waiver from the MCC requirements through the Connector. Note if you do not get a waiver for your health plan that does not meet MCC requirements, you will be penalized for not having health coverage by the Massachusetts Department of Revenue on your 2009 State taxes (i.e. you did not comply with the State's Individual Mandate).

It is important to note that open enrollment periods for many health plans occur in 2008- the period of coverage will go through portions of 2009 (i.e. there is a one year contract for coverage). Therefore in 2008 and beyond, many people will have to pick health plans that are MCC compliant to avoid being penalized on their Massachusetts State Taxes. For more information see our MCC section.

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How to find out if you are exempt from the Individual Mandate:

The Connector approved "the Affordability Standards and Schedule for the Individual Mandate" that determines who is exempt from the individual mandate (i.e. how it is determined as to whom is mandated to buy health insurance). Originally gross income was to be the income measure used to see who was going by DOR to determining who was going to be mandated to buy insurance. The Artists Foundation, with the help of the individual artists who testified at all three of the public hearings and due to the 40 artists who took the time to summit written testimony, successfully made the case for the Connector Board and Staff to change the measure to Adjusted Gross Income. (Special thanks to the ACT II Coalition and Health Care for All for their support on this issue as well!)

To find your adjusted gross income or what the Connector is calling annual income on their website for the individual mandate, look at the following: For Tax Form 1040- find line 37; For Form 1040A- find line 21; For Form 1040EZ- find line 4.

The Connector has an affordability tool on its website to help people determine if they are exempt from the mandate, please see the Connector's FAQ section- ARE THERE EXCEPTIONS?. (Note the Artists Health Care Working Group is well aware that an artist's income varies/fluctuates from month to month and year to years, so it may be hard, if not next to impossible to determine what your adjusted income will be for any Tax Year. The Artists Health Care Working Group is currently in discussions on how to address this important issue.)

The Connector has created "a generous and constructive process for appealing the applicability of the affordability schedule in light of an individual's circumstances" (Connector April 11, 2007 press release). The Connector has posted its Financial Hardship Waiver information for the Individual Mandate (to give you a sense to what to expect in 2008 and beyond).

IMPORTANT INFORMATION

1) RECOMMENDED PATH TO ENROLL IN HEALTH INSURANCE FOR ARTISTS WHO HAVE HARD TO DETERMINE INCOME

We strongly recommend that artists who have hard to determine income DO NOT enroll or sign up for any program/health insurance plan via the Connector's website or phone lines. Only use the Connector as a way to research your options. This is very important. It is best if you talk to a seasoned enrollment specialist from Health Care for All's FREE Helpline (1-800-272-4232) or enroll through an health care advocate at a health center, health agency or hospital to see if you are first eligible for a subsidized health plan and if you find out that you are not eligible THEN use the Connector to enroll in a non subsidized health plan (i.e. Commonwealth Choice plans). It is important to be able to have an enrollment specialist to be able to advocate on your behalf or with you if something does not go smoothly with your enrollment.

Note you can buy Commonwealth Choice Plans directly from the insurance carriers and not through the Connector. However, you can only buy the Young Adult Plans (Yap) through the Connector (make sure you review our health care options section before you buy a YAP) .BUT again be aware that when you can buy insurance as individual has drastically changed! See Commonwealth Choice/Private Market Insurance. See Community Partner's list to find an advocate near you: http://www.communitywalk.com/map/list/104183?order=0

There is a waiver/hardship process from the individual mandate and one also for Commonwealth Care premiums- we strongly suggest that you workwith an health care advocate to navigate any waiver/hardship process: Health Care for All's FREE Helpline (1-800-272-4232)

For Commonwealth Choice plans- Information and enrollment material is available online at www.MAhealthconnector.org or by calling the Health Connector's customer service center weekdays at 1-877-MA-ENROLL.

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