Does the Individual Mandate Still Apply?


UPDATE: Citing President Trump’s Executive Order, the U.S. Internal Revenue Service has announced that it will no longer require tax filers to indicate whether they had health coverage or paid a penalty set under the Affordable Care Act. 

Now that income tax season has arrived, recent activities and announcements regarding the repeal and replacement of the health law are raising questions on whether the uninsured will face tax penalties. Most of the confusion surrounds the uncertainties of how prompt the health law could be dismantled and how soon it could happen. Here, we explain more about the current standing of the individual mandate.

The January 20, 2017 Executive Order was the first step in replacing the health law, requiring that Federal agencies waive or exempt health law-related provisions that would impose costs or penalties on individuals, to the extent permitted by law. Later in a February 5th interview, President Trump revealed how the Republican replacement plan for the Patient Protection and Affordable Care Act (PPACA) could be introduced as late as 2018.

So, what does this mean for the individual mandate and the 27.2 Million non-elderly people who are currently uninsured?

As it stands, the individual mandate is still the law and in effect. This means that most uninsured people will be required to obtain health insurance coverage or face a tax penalty. The Center of Budget and Policy Priorities’ Senior Policy Analyst, Tara Straw, advises that taxpayers should not ignore the individual mandate, noting that “the requirement that people have health insurance or an exemption [from the mandate] is still in effect.” [1]

Earlier this open enrollment period (OEP), the Internal Revenue Service (IRS) enhanced its efforts to enroll consumers into coverage under the current health law. By targeting those that opted to pay the tax penalty in previous years, the agency is gearing up to send a series of notices to tax filers, including more than 800,000 between Nov 28 and Dec 5, and an additional 6.7 Million during the month of January [2]. In 2017, the individual mandate penalty was $695 per uninsured adult and $347.50 per child (up to $2,085 per household), or 2.5 percent of household income above the tax-filing threshold, whichever amount is greater [3].

The views and opinions expressed by the authors on this blog website and those providing comments are theirs alone, and do not reflect the opinions of Softheon, Inc. (dba Welltheos) or any employee thereof.

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Yvonne Villante
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Yvonne Villante

Senior Research Manager, Healthcare Reform at Welltheos
As our Senior Research Manager, I work closely with our Solution Architect, Product Management, and Sales teams. My role centers around competitive and market analyses, constructing premium content (whitepapers, research briefs, infographics), curating stories for our newsletters, and blogging.

I earned my BAA from the State University of New York at Stony Brook and MBA in Healthcare Administration from the University of Ohio (Athens). I was born and raised on Long Island, NY and enjoy capturing what the island has to offer through photography.
Yvonne Villante
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