How to Avoid Healthcare Mandate Penalty
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
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