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Return of the ACA Individual Mandate: Could This Incarnation Catch On?


When the Tax Cuts and Jobs Act (TCJA) killed the penalty on the Affordable Care Act's (ACA) individual mandate, most employers believed the ACA was effectively dead. But some states did not think killing the mandate was such a great idea and put forward legislation to keep the mandate alive on the state level.

As human resources professionals are well aware, the ACA's individual mandate required people to carry health insurance or pay a penalty.

However, beginning in 2019, individuals will no longer be required under the federal law to maintain health insurance because of the TCJA. It is a move that experts believe will cause volatility in the group health plan market.

Unfortunately for employers, the reporting requirements under the ACA are still in place — despite the repeal.

NJ, VT and Washington DC

Since the TCJA took effect, two states, New Jersey and Vermont, and DC passed bills to include their own individual mandate. NJ, VT and Washington, DC join Massachusetts, which had an individual mandate in place, since 2006, well before the ACA became law in 2010. Of NJ, VT and DC, New Jersey is the locale with the most specific details on how the penalties will be assessed/calculated. Under the law, which takes effect January 2019, NJ residents without minimum essential health coverage will pay a fine equal to 2.5% of their household income or $695 per adult and $347 per child, whichever is greater.

If the fine is based on a per-person charge, the maximum household/family penalty will be $2,085.

Even if you do not have employees in these locations, you should keep an eye on this trend.

Several other states have expressed interest in such a law. In fact, right after the TCJA was passed as many as nine states were strongly considering state-level individual mandate legislation. So there is a very good possibility the three recently passed state laws will not be the only ones we see moving forward.

Posted In: Affordable Care Act (ACA)

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