When people without health insurance file their taxes this year, many are going to be in for an unpleasant surprise. The “individual mandate” under the Affordable Care Act, commonly known as “Obamacare” or ACA, kicks in this year. In Massachusetts we have a lot of familiarity with individual mandates, because “Romneycare” has one too. However, we now find ourselves in a situation where one worker in Massachusetts can pay two separate penalties for not being able to afford health insurance. I am amazed that our Senators did not put a provision in the ACA to allow some sort of an offset for existing state penalties. I am hopeful that there will be some pressure put on them to do so when low income wage earners are forced to pay both penalties. If not, the I hope our new Governor will modify Romneycare to allow some offset for the federal penalty. Either way, I find it incredibly unfair that some low income working people in Massachusetts will be penalized twice for the same “transgression”.
As for my own clients, I have warned them that this is coming, and that they may see their total penalties go way up as a result. Many of them have told me that they simply cannot afford coverage. They have been paying the Romneycare penalty for years, and now they are just going to have to pay both. I really feel bad for these people, because they would still be struggling to get by, even if they did not have to pay any penalty at all. I also tell my clients without health insurance to apply for MassHealth, even if they think that they are ineligible. Sometimes, a denial from MassHealth will allow for an exemption to the Romneycare penalty.
Although the Massachusetts law and the Federal law are similar, in that both say that you must buy health insurance or face a penalty at tax time, they are not the same. In fact the ACA has a number of “Hardship Exemptions” that MA, does not have. My favorite ACA exemption is for people who have filed bankruptcy recently. The federal government does list these exemptions, and I am attaching a link here and the list below:
If any of the following circumstances apply to you, you may qualify for a “hardship” exemption from the penalty:
- You were homeless
- You were evicted in the past 6 months or were facing eviction or foreclosure
- You received a shut-off notice from a utility company
- You recently experienced domestic violence
- You recently experienced the death of a close family member
- You experienced a fire, flood, or other natural or human-caused disaster that caused substantial damage to your property
- You filed for bankruptcy in the last 6 months
- You had medical expenses you couldn’t pay in the last 24 months that resulted in substantial debt
- You experienced unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member
- You expect to claim a child as a tax dependent who’s been denied coverage in Medicaid and CHIP, and another person is required by court order to give medical support to the child. In this case, you don’t have the pay the penalty for the child.
- As a result of an eligibility appeals decision, you’re eligible for enrollment in a qualified health plan (QHP) through the Marketplace, lower costs on your monthly premiums, or cost-sharing reductions for a time period when you weren’t enrolled in a QHP through the Marketplace
- You were determined ineligible for Medicaid because your state didn’t expand eligibility for Medicaid under the Affordable Care Act
- Your individual insurance plan was cancelled and you believe other Marketplace plans are unaffordable
- You experienced another hardship in obtaining health insurance
The ACA also has a large number of people who are not subject to the Individual mandate in the first place. I do want to comment on one group in particular and that is people “not lawfully present in the U.S.”. This includes all manner of people who are out of status (so-called “undocumented workers” or “illegal aliens” depending on your point of view). This exemption also includes people covered under DACA and we are told that this exemption will cover people under the “Deferred Action – Parents” program that President Obama announced in November. Most blogs and websites written about the ACA that I have read say that this exemption applies to all non-U.S. Citizens. This is not true. The law says “not lawfully present”; it does not say ‘not a U.S. citizen’. What is more, the government website which describes who is eligible for the ACA specifically lists Lawful Permanent Aliens, along with a host of people who are not always considered to be “in status”, as covered.
The link to the Website listing the exemptions from coverage is here. I will reprint it below. The link to which non-citizens are covered and thus not exempt is here. I will reprint this list below as well.
Here is the list of people exempt from the Affordable Care Act or “Obamacare”:
- You’re uninsured for less than 3 months of the year
- The lowest-priced coverage available to you would cost more than 8% of your household income
- You don’t have to file a tax return because your income is too low (Learn about the filing limit (PDF))
- You’re a member of a federally recognized tribe or eligible for services through an Indian Health Services provider
- You’re a member of a recognized health care sharing ministry
- You’re a member of a recognized religious sect with religious objections to insurance, including Social Security and Medicare
- You’re incarcerated (either detained or jailed), and not being held pending disposition of charges
- You’re not lawfully present in the U.S.
- You qualify for a hardship exemption
Here is the discussion of what non citizens are still covered by the ACA, and thus still subject to the individual mandate:
Immigrants with the following statuses qualify to use the Marketplace:- Lawful Permanent Resident (LPR/Green Card holder)
- Asylee
- Refugee
- Cuban/Haitian Entrant
- Paroled into the U.S.
- Conditional Entrant Granted before 1980
- Battered Spouse, Child and Parent
- Victim of Trafficking and his/her Spouse, Child, Sibling or Parent
- Granted Withholding of Deportation or Withholding of Removal, under the immigration laws or under the Convention against Torture (CAT)
- Individual with Non-immigrant Status (includes worker visas, student visas, and citizens of Micronesia, the Marshall Islands, and Palau)
- Temporary Protected Status (TPS)
- Deferred Enforced Departure (DED)
- Deferred Action Status (Deferred Action for Childhood Arrivals (DACA) is not an eligible immigration status for applying for health insurance)
- Lawful Temporary Resident
- Administrative order staying removal issued by the Department of Homeland Security
- Member of a federally-recognized Indian tribe or American Indian Born in Canada
- Resident of American Samoa
Applicants for any of these statuses qualify to use the Marketplace:
- Temporary Protected Status with Employment Authorization
- Special Immigrant Juvenile Status
- Victim of Trafficking Visa
- Adjustment to LPR Status
- Asylum (see note below)
- Withholding of Deportation, or Withholding of Removal, under the immigration laws or under the Convention against Torture (CAT) (see note below)
Applicants for asylum are eligible for Marketplace coverage only if they’ve been granted employment authorization or are under the age of 14 and have had an application pending for at least 180 days.
People with the following statuses and who have employment authorization qualify for the Marketplace:- Registry Applicants
- Order of Supervision
- Applicant for Cancellation of Removal or Suspension of Deportation
- Applicant for Legalization under IRCA
- Legalization under the LIFE Act