KHI News Service

Feds post proposed regulations for health insurance mandate

Exemption allowed for people in states that don't expand Medicaid

By KHI NEWS SERVICE | January 30, 2013

Federal officials today posted their proposed regulations dealing with exemptions to the upcoming requirement that everyone who can afford health insurance have it or pay a penalty.

Under terms of the Affordable Care Act, commonly referred to as Obamacare, the insurance coverage obligation is scheduled to begin Jan. 1, 2014. Administration officials are calling it the "shared responsibility provision," but opponents of the law and many others generally refer to it as the "individual mandate."

The law was approved in 2010 and mostly upheld by the U.S. Supreme Court in June 2012, including the individual mandate provision, which 25 states, including Kansas, challenged.

The proposed regulations spell out the "minimum essential coverage" that would be required of individuals and also the criteria for exemptions to the mandate.


HHS Exemption Regs

Download .PDF


IRS Individual Mandate Regs

Download .PDF

The regulations were issued jointly by the Treasury Department, Internal Revenue Service and the Centers for Medicare and Medicaid Services.

Persons who go without health insurance after Jan. 1, would be spared a tax penalty if they can't afford health insurance, if they spend less than three consecutive months without coverage or if they qualify for other exemptions ranging from hardship to religious beliefs.

The regulations also would exempt from penalty people whose income would qualify them for Medicaid coverage but live in states that choose not to expand eligibility to include those earning up to 133 percent of federal poverty guidelines, or about $25,000 a year for a family of three.

The Affordable Care Act initially would have required all states to expand Medicaid eligibility to that level, but the U.S. Supreme Court, in its ruling, declared that state's could not be required to open up their Medicaid programs.

Last week, a Wichita Democrat, Rep. Jim Ward, introduced a bill that would expand the Kansas program, currently one of the most restrictive in the nation.

But the Legislature is dominated by Republicans, many of whom have expressed concerns about potential costs to the state, if more people are added to the Medicaid rolls.

Gov. Sam Brownback, a conservative Republican, and an early opponent of the health reform law, has said he is still studying the issue and has not come down yet one way or the other.

Republican legislators and governors in other states have reconsidered or are reconsidering their earlier opposition to Medicaid expansion.

The proposed regulations also provide that hardship exemptions will be available on a case-by-case basis for individuals who face other unexpected personal or financial circumstances that stop them from getting coverage.

According to the Congressional Budget Office, less than 2 percent of Americans are expected to pay penalties for not having health insurance after the new requirement kicks in.

The proposed regulations also detail what qualifies for "minimum essential coverage," which would include:

  • Employer-sponsored coverage (including COBRA coverage and retiree coverage)
  • Coverage purchased in the individual market
  • Medicare Part A coverage
  • Medicaid coverage
  • Children's Health Insurance Program (CHIP) coverage
  • Certain types of Veterans health coverage

Certain specialized coverage, such as coverage only for vision care or dental care, workers’ compensation, or coverage only for a specific disease or condition would not meet the "minimum essential coverage" standard.

Federal officials are seeking comments on the proposed regulations.

Comments on the Treasury proposed regulations are due by May 2, and a public hearing will be held May 29. Comments on the HHS proposed regulations are due by March 18.

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