CMS Details Additional Process for Providing Relief for Consumers from Individual Mandate
Today’s announcement provides American consumers with the additional option
to claim a hardship exemption from the individual mandate
Today, the Centers for Medicare & Medicaid Services (CMS) announced a new, more streamlined way for consumers to claim a hardship exemption from the tax penalty imposed for not maintaining health coverage for 2018 on their federal income tax returns, making it easier for taxpayers across the nation to claim their exemption. Of the $3 billion the Internal Revenue Service (IRS) collected from taxpayers in individual mandate penalties in 2015, over 5 million households, or nearly 80 percent, earned $50,000 a year or less.[1] The individual mandate penalty is yet another example of how the ACA hurts low and middle income Americans the most, and today’s action reflects our commitment to minimize the impact of Obamacare’s failures.
For 2018, the Patient Protection and Affordable Care Act (PPACA) requires that all Americans get health coverage that qualifies as minimum essential coverage (MEC) or pay a penalty, commonly known as the “individual mandate.” Individuals that do not maintain enrollment in MEC or qualify for an exemption must pay a penalty. An individual may be eligible for a hardship exemption if they experience certain circumstances that prevent them from obtaining coverage, such as homelessness or experience a fire, flood, or other natural disaster.
This new option to claim a hardship exemption through the federal tax filing process responds to President Trump’s first Executive Order, where he directed agencies to minimize the unwarranted economic and regulatory burdens of the PPACA. The President’s Executive Order directs agencies to exercise all authority and discretion available to them to grant exemptions from PPACA requirements that would impose a financial burden on individuals and families. Today’s announcement also follows the 2017 Tax Cuts and Jobs Act, which reduced the individual mandate penalty to $0 for months beginning on or after January 1, 2019.
“Today’s announcement shows how President Trump’s Administration is working to ease the burden of Obamacare.” said CMS Administrator Seema Verma. “Although the tax cuts signed by the President earlier this year eliminate the mandate penalty starting in 2019, Americans are still under threat of the penalty for this tax year of 2018. This guidance will simplify how consumers claim the hardship exemption from the individual mandate directly on their tax return.”
Specifically through today’s guidance, CMS is announcing additional details on how the Agency is making it easier for taxpayers to claim a hardship exemption on a federal income tax return without presenting the documentary evidence or written explanation generally required for hardship exemptions. Consumers should, of course, keep with their other tax records any documentation that demonstrates qualification for the hardship exemption. Consumers can still apply for these exemptions through the Exchange using the existing application process.
To see the guidance issued today, please go to: https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Authority-to-Grant-HS-Exemptions-2018-Final-91218.pdf
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[1] https://www.irs.gov/statistics/soi-tax-stats-historic-table-2