How to Avoid Healthcare Mandate Penalty

How to Avoid Healthcare Mandate Penalty
Healthcare Mandate

Healthcare Mandate

Open Enrollment Allows Avoidance of Healthcare Mandate Penalty

The Centers for Medicare and Medicaid Services recently announced a special enrollment period for

anyone who did not meet the requirements of the Affordable Care Act’s 2014 individual health

insurance mandate. The mandate states that non-excluded individuals who did not obtain health

insurance in 2014 must pay a penalty equal to either $95 or 1% of the annual household income,

whichever is greater. This penalty has increased to $325 or 2% of household income for 2015, with an

additional increase scheduled for 2016.

According to the original guidelines of the individual healthcare mandate, anyone who did not obtain

health insurance in 2014 had until February 15th to enroll in a policy for the current year. However,

because it was felt that many taxpayers would be unaware of this deadline until they were forced to

claim a penalty on their 2014 tax return, the Centers for Medicare and Medicaid Services decided to

extend the 2015 enrollment period until the end of April. This extension allows individuals to avoid the

2015 penalty as long as they enroll in a health insurance policy before the extension deadline. They must

also attest to the fact that they have paid the 2014 penalty with the filing of their 2014 taxes and live in

one of the 37 states that have a federally facilitated Exchange Marketplace.

The individual mandate discussed above is separate from the employer mandate which requires

businesses with over a certain number of employees to provide health insurance for full time

employees. The employer mandate, which is being phased in over the next two years, requires business

owners with over 100 employees to provide health insurance for at least 70% of employees who work

more than 30 hours per week. It increases that percentage to 95% for 2016 and expands the

requirement to include all businesses with 50 or more full time employees. While the special enrollment

period does not apply to those governed by the employer mandate, it does apply to the self-employed

as well as of members of partnerships and LLCs and employees of other small businesses who must

meet the requirements of the individual mandate.

The announcement of this special enrollment period highlights the fact that healthcare requirements

are in a constant state of flux. For businesses, regardless of size or structure, this is equally true for other

regulatory measures including those governing tax, payroll and employee benefits, among other things.

Because these requirements are constantly changing, the bookkeeping services arm of a company has a

very important and difficult task. It is their job to continually monitor both federal and state laws to

ensure that the businesses they serve remain compliant with all current, applicable legislation.

If your business is seeking an outsourced bookkeeping solution, the experienced professionals at Orange

County Bookkeeping can provide you with the expertise you are looking for. Our licensed accountants

and bookkeepers are equipped to serve Orange County businesses of any size, structure or industry

focus. Visit us today at to learn more about our full range of bookkeeping, tax

and business consulting services. Contact us by phone at (949) 242-9852 at or by email at to receive a free, no obligation consultation.

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