individual shared responsibility provision
{{Short description|American health insurance tax mandate}}
{{Use mdy dates|date=July 2024}}
The individual shared responsibility provision,{{Cite web|title = Individual Shared Responsibility Provision|url = https://www.irs.gov/Affordable-Care-Act/Individuals-and-Families/Individual-Shared-Responsibility-Provision|website = www.irs.gov|access-date = 2016-02-14|archive-date = October 2, 2024|archive-url = https://web.archive.org/web/20241002022804/https://www.irs.gov/affordable-care-act/individuals-and-families/individual-shared-responsibility-provision|url-status = live}} less formally known as the individual mandate, was the health insurance mandate imposed on individuals by the Affordable Care Act in the United States until tax year 2019. This individual mandate required most individuals and their families to have a certain minimal amount of health insurance, with certain exemptions. Otherwise, they were required to pay the individual shared responsibility payment as a fine.{{Cite web|url=https://www.npr.org/sections/health-shots/2016/02/17/466924991/taxpayers-confused-by-late-health-law-forms|title=Taxpayers Confused By Late Health Law Forms|last=Andrews|first=Michelle|date=2016-02-17|website=npr.org|publisher=|access-date=2016-09-02|archive-date=October 2, 2024|archive-url=https://web.archive.org/web/20241002022800/https://www.npr.org/sections/health-shots/2016/02/17/466924991/taxpayers-confused-by-late-health-law-forms|url-status=live}}{{Cite web|url=http://www.cbsnews.com/news/what-you-need-to-know-about-obamacare-tax-forms/|title=What you need to know about Obamacare tax forms|last=Martin|first=Ray|date=2016-01-04|website=cbsnews.com|publisher=|access-date=2016-09-02|archive-date=October 2, 2024|archive-url=https://web.archive.org/web/20241002022801/https://www.cbsnews.com/news/what-you-need-to-know-about-obamacare-tax-forms/|url-status=live}} It was one of the many Affordable Care Act tax provisions. The federal tax penalty for violating the mandate was eliminated by the Tax Cuts and Jobs Act of 2017, starting in 2019.{{cite web |title=Individual Mandate Penalty You Pay If You Don't Have Health Insurance Coverage |url=https://www.healthcare.gov/fees/fee-for-not-being-covered/ |website=HealthCare.gov |access-date=15 December 2020 |language=en |archive-date=October 2, 2024 |archive-url=https://web.archive.org/web/20241002022757/https://www.healthcare.gov/glossary/fee/ |url-status=live }} (In order to pass the Senate under reconciliation rules with only 50 votes, the requirement itself is still in effect, just with the fine set to $0).{{Cite web |url=https://www.commonwealthfund.org/publications/fund-reports/2018/jul/eliminating-individual-mandate-penalty-behavioral-factors |title=The Effect of Eliminating the Individual Mandate Penalty and the Role of Behavioral Factors |access-date=July 10, 2019 |archive-date=July 15, 2018 |archive-url=https://web.archive.org/web/20180715040810/https://www.commonwealthfund.org/publications/fund-reports/2018/jul/eliminating-individual-mandate-penalty-behavioral-factors |url-status=live }}Pear, Robert. [https://www.nytimes.com/2017/12/18/us/politics/tax-cut-obamacare-individual-mandate-repeal.html “Without the Insurance Mandate, Health Care’s Future May Be in Doubt”] {{Webarchive|url=https://web.archive.org/web/20220116100306/https://www.nytimes.com/2017/12/18/us/politics/tax-cut-obamacare-individual-mandate-repeal.html |date=January 16, 2022 }}, The New York Times (December 18, 2017).Sullivan, Peter. [https://thehill.com/policy/healthcare/362838-senate-gop-repeals-obamacare-mandate/ “Senate GOP repeals ObamaCare mandate”] {{Webarchive|url=https://web.archive.org/web/20240417131641/https://thehill.com/policy/healthcare/362838-senate-gop-repeals-obamacare-mandate/ |date=April 17, 2024 }}, The Hill (December 2, 2017).Jost, Timothy. [https://www.healthaffairs.org/do/10.1377/forefront.20171220.323429/full/ "The Tax Bill And The Individual Mandate: What Happened, And What Does It Mean?"] {{Webarchive|url=https://web.archive.org/web/20220112031144/https://www.healthaffairs.org/do/10.1377/forefront.20171220.323429/full/ |date=January 12, 2022 }}, Health Affairs (December 20, 2017).
Summary
Starting January 2014, individuals and their families must have at least minimum essential coverage.{{Cite web|url=http://www.veteransreporternews.com/2016/01/the-individual-shared-responsibility-provision-the-basics/|archive-url=https://web.archive.org/web/20160918030354/http://www.veteransreporternews.com/2016/01/the-individual-shared-responsibility-provision-the-basics/|url-status=dead|archive-date=September 18, 2016|title=The Individual Shared Responsibility Provision – The Basics – Veterans Reporter News|website=www.veteransreporternews.com|access-date=2016-08-23}} Individuals may be exempt from health insurance coverage in some cases:
- The minimum amount that they must pay for annual premiums is more than eight percent of their household income.
- They have a gap in coverage for less than three consecutive months.
- They belong to a group explicitly exempted from participating.
- They qualify for an exemption for one of several other reasons, such as a hardship that prevents them from obtaining coverage.
Individuals and their families who have no health insurance, are required to make the shared responsibility payment.{{Cite web|title = The Individual Shared Responsibility Payment - An Overview|url = https://www.irs.gov/Affordable-Care-Act/The-Individual-Shared-Responsibility-Payment-An-Overview|website = www.irs.gov|access-date = 2016-02-14|archive-date = October 2, 2024|archive-url = https://web.archive.org/web/20241002022800/https://www.irs.gov/affordable-care-act/the-individual-shared-responsibility-payment-an-overview|url-status = live}}
History
The Patient Protection and Affordable Care Act signed in 2010 imposed a health insurance mandate to take effect in 2014. On June 28, 2012, the Supreme Court of the United States upheld the health insurance mandate as a valid tax within Congress's taxing power in the case National Federation of Independent Business v. Sebelius.
The federal tax penalty for violating the mandate was zeroed out by the Tax Cuts and Jobs Act of 2017, starting in 2019. This raised questions about whether the Affordable Care Act was still constitutional, but in California v. Texas, the Supreme Court ruled that plaintiffs who had challenged the law on this basis lacked standing to sue.{{Cite news |last=Liptak |first=Adam |date=2021-06-17 |title=Affordable Care Act Survives Latest Supreme Court Challenge |url=https://www.nytimes.com/2021/06/17/us/obamacare-supreme-court.html |access-date=2024-07-26 |work=The New York Times |language=en-US |issn=0362-4331}}
Minimum essential coverage
Whether health care coverage qualifies as minimum essential coverage depends largely on the type of coverage it is.{{Cite web|title = Individual Shared Responsibility Provision - Minimum Essential Coverage|url = https://www.irs.gov/Affordable-Care-Act/Individuals-and-Families/ACA-Individual-Shared-Responsibility-Provision-Minimum-Essential-Coverage|website = www.irs.gov|access-date = 2016-02-14|archive-date = October 2, 2024|archive-url = https://web.archive.org/web/20241002022800/https://www.irs.gov/affordable-care-act/individuals-and-families/individual-shared-responsibility-provision-minimum-essential-coverage|url-status = live}} Most coverage that people have is considered to be minimum essential coverage. However, coverage providing only limited benefits does not qualify as minimum essential coverage.
| class="wikitable"
|+The following table mentions some of the more common health care coverage situations and whether or not they qualify as minimum essential coverage. !Coverage type !Examples !Qualifies as minimum essential coverage? |
| Employer-sponsored coverage
|
|Yes |
| Individual health coverage
|
|Yes |
| Coverage under government-sponsored programs
|
|Yes |
| Coverage that provides limited benefits
|
|No |
Coverage exemption
If individuals or anyone in their families claim an exemption from minimum essential coverage, individuals are not required to make a shared responsibility payment. If individuals have a gross income below the tax return filing threshold for a certain year, they are automatically exempt from the shared responsibility provision for that year.{{Cite web|title = Individual Shared Responsibility Provision – Exemptions: Claiming or Reporting|url = https://www.irs.gov/Affordable-Care-Act/Individuals-and-Families/ACA-Individual-Shared-Responsibility-Provision-Exemptions#Exemptions%20and%20Who%20Grants%20Them|website = www.irs.gov|access-date = 2016-02-14|archive-date = October 2, 2024|archive-url = https://web.archive.org/web/20241002022805/https://www.irs.gov/affordable-care-act/individuals-and-families/aca-individual-shared-responsibility-provision-exemptions#Exemptions%20and%20Who%20Grants%20Them|url-status = live}}
Most exemptions are claimed using Form 8965, Health Coverage Exemptions{{Cite web|url = https://www.irs.gov/pub/irs-prior/f8965--2015.pdf|title = Form 8965 Health Coverage Exemptions|date = |access-date = 2016-02-15|website = |publisher = Internal Revenue Service|last = |first = |archive-date = October 2, 2024|archive-url = https://web.archive.org/web/20241002022646/https://www.irs.gov/pub/irs-prior/f8965--2015.pdf|url-status = live}}, when a tax return is filed. However, certain exemptions must be granted by the health insurance marketplace in advance, like coverage exemptions for certain hardship situations and for members of certain religious sects.
| class="wikitable"
|+The following table shows some types of exemptions available and indicates whether the exemption is granted by the marketplace, claimed on a tax return, or both. !Exemptions !Granted by marketplace, claimed on tax return, or either |
| Coverage is considered unaffordable
|Tax return |
| Income below the return filing threshold
|Tax return |
| Citizens living abroad
|Tax return |
| Nonresidents
|Tax return |
| Member of Indian tribe
|Either |
| Member of certain religious sects
|Marketplace |
| General hardship
|Marketplace |
| Resident of a state that did not expand Medicaid
|Either |
Shared responsibility payment (eliminated as of tax year 2019)
Individuals without minimum essential coverage were required to make the shared responsibility payment until the end of tax year 2018, unless they qualified for exemptions. When the Tax Cuts and Jobs Act went into effect in 2018, it eliminated this tax penalty as of tax year 2019. The worksheets located in the instructions{{Cite web|url = https://www.irs.gov/pub/irs-prior/i8965--2015.pdf|title = Instructions for Form 8965|date = |access-date = 2016-02-15|website = |publisher = Internal Revenue Service|last = |first = |archive-date = October 2, 2024|archive-url = https://web.archive.org/web/20241002023146/https://www.irs.gov/pub/irs-prior/i8965--2015.pdf|url-status = live}} to Form 8965, Health Coverage Exemptions, could be used to figure the shared responsibility payment amount that was due while still in effect. The annual payment amount was a percentage of the household income in excess of the return filing threshold or a flat dollar amount, whichever was greater.{{Cite web|title = Individual Shared Responsibility Provision – Reporting and Calculating the Payment|url = https://www.irs.gov/Affordable-Care-Act/Individuals-and-Families/ACA-Individual-Shared-Responsibility-Provision-Calculating-the-Payment|website = www.irs.gov|access-date = 2016-02-14|archive-date = October 2, 2024|archive-url = https://web.archive.org/web/20241002023255/https://www.irs.gov/affordable-care-act/individuals-and-families/aca-individual-shared-responsibility-provision-calculating-the-payment|url-status = live}}{{Cite web|url=https://www.forbes.com/sites/ashleaebeling/2014/12/15/new-obamacare-tax-this-filing-season-your-shared-responsibility/#2406a4c0909d|title=New Obamacare Tax This Filing Season: Your Shared Responsibility|last=Ebeling|first=Ashlea|website=Forbes|access-date=2016-08-23|archive-date=February 15, 2017|archive-url=https://web.archive.org/web/20170215035725/http://www.forbes.com/sites/ashleaebeling/2014/12/15/new-obamacare-tax-this-filing-season-your-shared-responsibility/#2406a4c0909d|url-status=live}}