This provides information on your health insurance coverage to the IRS. It is required to be reported due to the individual mandate which requires that all eligible Americans have at least basic health coverage. If you did not have insurance coverage for all months during 2014 or obtain an exemption, you will need to compute your shared responsibility payment.
Commonly Asked Questions
As we continue to review the healthcare law, we have prepared these commonly asked questions to help individuals and employers better understand what the Affordable Care Act will mean to them. Many of these are questions we’ve received from customers. We will continue to add to these as we obtain additional information and receive more questions. The answers provided are meant to help guide you through these changes. You should consult legal and tax experts to understand how the law will affect your individual or business circumstances.
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The information must be reported on your individual 2014 tax return (Form 1040).
All health plans administered or insured by Blue Cross and Blue Shield of Alabama are considered minimum essential coverage (MEC) except for: stand-alone dental, stand-alone vision, stand-alone HSA/HRA accounts and Health FSA accounts.
If you can answer “yes” to this question, check the “full-year coverage” box on your tax form. Since you and your dependents were covered for the entire year, no dollar amount should be entered.
Exemptions are reported to the IRS on Form 8965, Health Coverage Exemptions. Use this link to see all exemption types to help you determine if you are eligible. http://www.irs.gov/pub/irs-dft/i8965--dft.pdf
Complete the Shared Responsibility Worksheet and enter your fee on the appropriate line of your tax form. The Shared Responsibility Worksheet can be found in the instructions to Form 8965. http://www.irs.gov/pub/irs-dft/i8965--dft.pdf
IRS Publication 5187 - IRS offers publication to address questions on health care law – “Health Care Law: What’s New for Individuals & Families” http://www.irs.gov/pub/irs-pdf/p5187.pdf
The rulings may take months to be fully resolved by the courts. In the meantime, Blue Cross and Blue Shield of Alabama is committed to providing individuals and families access to quality, affordable healthcare.
No, because this plan is individual insurance, it is not designed to satisfy the rules for group insurance. Therefore, your employer is not allowed to endorse or sponsor the plan.
Among other things, this means the following:
1.Your employer is not permitted to pay for or reimburse you for any portion of the premiums that you are required to pay under the plan.
2.Your employer is not allowed to offer the plan to you through a Section 125 Plan.
We encourage you to cancel your coverage under this plan when you become enrolled for Medicare.
You must notify Blue Cross immediately when you or someone on your contract becomes enrolled for any part of Medicare (Parts A, B or D). Please call Blue Cross at 1-888-543-9212, or visit us at www.bcbsalmedicare.com, to learn about options available to those who are Medicare eligible.
Yes, you may switch plans during Open Enrollment or during a Special Enrollment Period.
If you obtain coverage under some other group or individual health policy or plan, you may still keep this plan. Blue Cross coordinates benefits under this plan with other group and non-group plans. For more information, please review the Coordination of Benefits section of the contract booklet.
If you qualify for a Special Enrollment Period, you may add a spouse or dependent to your plan. Otherwise, you may add a spouse or child during Open Enrollment. See, “How can I apply outside of Open Enrollment?” for more information.
When you first apply for the plan, you will be given the option to cover eligible family members.
Your spouse can be covered under the plan if he or she is a resident of the state of Alabama.
Your married or unmarried child may likewise be covered if, at the time of your application, he or she is under the age of 26 and is a resident of the state of Alabama. In addition, the child must be your natural child, stepchild, legally adopted child, child placed for adoption, or eligible foster child. An eligible foster child is a child that is placed with you by an authorized placement agency or by court order.
You may not cover your grandchild unless your grandchild is your adopted child, child placed for adoption or your eligible foster child.
Adult vision coverage is only available on our Blue Choice® Platinum plan.
Your contract will cancel; coverage is for Alabama residents only.
If payment is made with a check, the check will be cashed and applied when received. If the application is denied, Blue Cross will refund the applicant.
When you enroll online, your credit card is not charged until your application is approved (most applications are approved immediately). Once the application is approved, the charge is applied to the first month's premium. If the application is denied, the card will not be charged.
If payment is not received with the application, a bill is automatically generated. This will not delay the application process; however, if payment is not received by the effective date of coverage, the contract will cancel. If your contract is effective, you can make a one-time payment online through myBlueCross.
If we decline to issue a contract, we will refund any fees paid with respect to the application. You will receive a denial letter in the mail.
The enrollment process generally takes between 15 and 30 minutes.
Each person on the contract will be rated based on their age, their tobacco usage, and the county in which the contract holder lives. Once each member has been rated, then all amounts will be added together to get the family rate. For children age 20 and under, the oldest three children will be individually rated and included in the family premium amount, and any additional children will be free. All dependent children, age 21 and older, will be individually rated and included in the family premium amount.
Watch this video to learn about Member Level Rating.
Plan coverage ends for you and your dependents when the first of the following happens:
1. You fail to pay all applicable fees for coverage within the first 30 days following the effective date of your coverage, in which case coverage for you and your dependents will be canceled as of the effective date of coverage;
2. You fail to pay subsequent fees for coverage within the 10-day grace period (if you are receiving a subsidy through the Marketplace, there is a 90-day grace period);
3.You are no longer a resident of Alabama;
4.For spouses, the first day of the month following divorce or other termination of marriage;
5.For children, the first day of the month following the date a child ceases to be a dependent;
6.For all covered dependents, the first day of the month following the date of a subscriber's death unless proper documentation is received within 30 days from the date of death to allow coverage to continue (we will not notify the subscriber's dependents upon the date of death of his/her options to continue coverage);
7.For any member, the date of his or her death;
8.Upon discovery of fraud or intentional misrepresentation or omission of a material fact; or
9.Upon termination of the plan.
In order to apply for a plan outside of Open Enrollment, you must have a qualifying life event that results in a Special Enrollment Period. Most Special Enrollment Periods last 60 days from the date of the qualifying event. Qualifying life events that create a Special Enrollment Period include:
Placement for adoption
Permanent move into Alabama
Loss of health insurance coverage due to contract holder's death
Loss of health insurance coverage
No longer eligible for subsidy
Gain of citizenship or nationality
Of American Indians or Alaskan Natives ancestry
If you are currently a Blue Cross member and need to add a dependent to your plan, please call the Customer Service number located on the back of your identification card.
Open Enrollment for the individual market begins November 1, 2015, and ends January 31, 2016. You may enroll anytime during Open Enrollment.
If you apply between:
• November 1, 2015, and December 15, 2015, coverage will begin January 1, 2016.
• December 16, 2015, and January 15, 2016, coverage will begin February 1, 2016.
• January 16, 2016, and January 31, 2016, coverage will begin March 1, 2016.
Yes, pediatric dental is part of the essential health benefits required under section 1302(a) of the Patient Protection and Affordable Care Act for children up to age 19. Pediatric dental consists of services such as routine cleaning, exams, fillings and oral surgery.
Yes. The Affordable Care Act may contribute to an increase in premiums for Medicare Advantage and Prescription Drug Plans. These plans may also experience an increase in deductibles and copays over time. Medicare Supplement plans are not currently impacted.
Coverage of comprehensive lactation support and counseling and costs of renting or purchasing breastfeeding equipment extends for the duration of breastfeeding. Nonetheless, consistent with PHS Act section 2713 and its implementing regulations, plans and issuers may use reasonable medical management techniques to determine the frequency, method, treatment, or setting for a recommended preventive item or service, to the extent not specified in the recommendation or guideline. (Source: U.S. Departmentof Labor)
Reimbursement policy is outside of the scope of the HRSA Guidelines and the Departments' regulations. (Source: U.S. Department of Labor)
Under the topic of "Breastfeeding Counseling" the USPSTF recommends interventions during pregnancy and after birth to promote and support breastfeeding. The HRSA Guidelines specifically incorporate comprehensive prenatal and postnatal lactation support, counseling, and equipment rental. Accordingly, the items and services described in the HRSA Guidelines are required to be covered in accordance with the requirements of the interim final regulations (that is, without cost-sharing, subject to reasonable medical management, which may include purchase instead of rental of equipment). (Source: U.S. Department of Labor)
Yes, if approved by the FDA and prescribed for a woman by her health care provider, subject to reasonable medical management. (Source: U.S. Department of Labor)
Yes. Services related to follow-up and management of side effects, counseling for continued adherence, and device removal are included under the HRSA Guidelines and required to be covered in accordance with the requirements of the interim final regulations (that is, without cost-sharing, subject to reasonable medical management). (Source: U.S. Department of Labor)
Contraceptive methods that are generally available OTC are only included if the method is both FDA-approved and prescribed for a woman by her health care provider. The HRSA Guidelines do not include contraception for men. (Source: U.S. Department of Labor)
Contraceptive methods that are generally available OTC are only included if the method is both FDA-approved and prescribed for a woman by her health care provider. The HRSA Guidelines do not include contraception for men. (Source: U.S. Department of Labor)
No. The HRSA Guidelines ensure women's access to the full range of FDA-approved contraceptive methods including, but not limited to, barrier methods, hormonal methods, and implanted devices, as well as patient education and counseling, as prescribed by a health care provider. Consistent with PHS Act section 2713 and its implementing regulations, plans and issuers may use reasonable medical management techniques to control costs and promote efficient delivery of care. For example, plans may cover a generic drug without cost-sharing and impose cost-sharing for equivalent branded drugs. However, in these instances, a plan or issuer must accommodate any individual for whom the generic drug (or a brand name drug) would be medically inappropriate, as determined by the individual's health care provider, by having a mechanism for waiving the otherwise applicable cost-sharing for the branded or non-preferred brand version. This generic substitution approach is permissible for other pharmacy products, as long as the accommodation described above exists. If, however, a generic version is not available, or would not be medically appropriate for the patient as a prescribed brand name contraceptive method (as determined by the attending provider, in consultation with the patient), then a plan or issuer must provide coverage for the brand name drug in accordance with the requirements of the interim final regulations (that is, without cost-sharing, subject to reasonable medical management). (Source: U.S. Department of Labor)
Yes. In this context, "screening" means testing. (Source: U.S. Departmentof Labor)
The HRSA Guidelines recommend high-risk HPV DNA testing for women with normal cytology results who are 30 years of age or older to occur no more frequently than every 3 years. (Source: U.S. Department of Labor)
Screening may consist of a few, brief, open-ended questions. Screening can be facilitated by the use of brochures, forms, or other assessment tools including chart prompts. Counseling provides basic information, including how a patient's health concerns may relate to violence and referrals to local domestic violence support agencies when patients disclose abuse. Easy-to-use tools such as patient brochures, safety plans, and provider educational tools, as well as training materials, are available through the HHS-funded Domestic Violence Resource Network, including the National Resource Center on Domestic Violence. (Source: U.S. Department of Labor)
The HRSA Guidelines recommend at least one annual well-woman preventive care visit for adult women to obtain the recommended preventive services that are age- and developmentally-appropriate, including preconception and prenatal care. The HRSA Guidelines recommend that well-woman visits include preventive services listed in the HRSA Guidelines, as well as others referenced in section 2713 of the PHS Act. HHS understands that additional well-woman visits, provided without cost-sharing, may be needed to obtain all necessary recommended preventive services, depending on a woman's health status, health needs, and other risk factors. If the clinician determines that a patient requires additional well-woman visits for this purpose, then the additional visits must be provided in accordance with the requirements of the interim final regulations (that is, without cost-sharing and subject to reasonable medical management). (Source: U.S. Department of Labor)
No. Section 2713 of the PHS Act and its implementing regulations allow plans and issuers to use reasonable medical management techniques to determine the frequency, method, treatment, or setting for a recommended preventive item or service, to the extent this information is not specified in a recommendation or guideline. Although the HRSA Guidelines list services individually, nothing in PHS Act section 2713 or the regulations requires that each service be provided in a separate visit. Efficient care delivery and the delivery of multiple prevention and screening services at a single visit is a reasonable medical management technique, permissible under the regulations. For example, HIV screening and counseling and Sexually Transmitted Infections counseling could occur as part of a single well-woman visit. (Source: U.S. Department of Labor)
PHS Act section 2713 and the interim final regulations require coverage for immunizations for routine use in children, adolescents, and adults that have in effect a recommendation by the ACIP for routine use. The vaccines must be covered without cost-sharing requirements when the service is delivered by an in-network provider. The ACIP makes routine immunization recommendations for children, adolescents, and adults that are population-based (e.g., age-based), risk-based (e.g., underlying medical conditions, work-related, or other special circumstances that increase risk of illness), or are catch-up recommendations.
In some circumstances, the ACIP makes a recommendation that applies for certain individuals rather than an entire population. In these circumstances, health care providers should determine whether the vaccine should be administered, and if the vaccine is prescribed by a health care provider consistent with the ACIP recommendations, a plan or issuer is required to provide coverage for the vaccine without cost-sharing.
New ACIP recommendations will be required to be covered without cost-sharing starting with the plan year (in the individual market, policy year) that begins on or after the date that is one year after the date the recommendation is issued. An ACIP recommendation is considered to be issued on the date on which it is adopted by the Director of the Centers for Disease Control and Prevention (CDC), which is the earlier of: the date the recommendation is published in the Mortality and Morbidity Weekly Report, or the date the recommendation is reflected in the Immunization Schedules of the CDC. (Source: U.S. Department of Labor)
Identification of "high-risk" individuals is determined by clinical expertise. Decisions regarding whether an individual is part of a high-risk population, and should therefore receive a specific preventive item or service identified for those at high-risk, should be made by the attending provider. Therefore, if the attending provider determines that a patient belongs to a high-risk population and a USPSTF recommendation applies to that high-risk population, that service is required to be covered in accordance with the requirements of the interim final regulations (that is, without cost-sharing, subject to reasonable medical management). (Source: U.S. Department of Labor)
Yes. HHS believes that the scope of the recommendation includes both genetic counseling and BRCA testing, if appropriate, for a woman as determined by her health care provider.
PHS Act section 2713 addresses coverage for evidence-based items or services with a rating of "A" or "B" in the current recommendations of the USPSTF, as well as coverage for preventive care and screenings as provided for in comprehensive guidelines released by HRSA. The USPSTF recommends with a "B" rating that "women whose family history is associated with an increased risk for deleterious mutations in the BRCA1 or BRCA2 genes be referred for genetic counseling and evaluation for BRCA testing."
The HRSA Guidelines, released by HHS in August 2011, incorporate by reference relevant portions of an Institute of Medicine (IOM) Report, released on July 19, 2011. In some instances, the IOM Committee Report provides additional interpretation of USPSTF recommendations. For the USPSTF BRCA recommendation, the IOM Committee interpreted the recommendation to include "referral for genetic counseling and BRCA testing, if appropriate." Thus, genetic counseling and BRCA testing, if appropriate, must be made available as a preventive service without cost-sharing. (Source: U.S. Department of Labor)
No. Based on clinical practice and comments received from the American College of Gastroenterology, American Gastroenterological Association, American Society of Gastrointestinal Endoscopy, and the Society for Gastroenterology Nurses and Associates, polyp removal is an integral part of a colonoscopy. Accordingly, the plan or issuer may not impose cost-sharing with respect to a polyp removal during a colonoscopy performed as a screening procedure. On the other hand, a plan or issuer may impose cost-sharing for a treatment that is not a recommended preventive service, even if the treatment results from a recommended preventive service. (Source: U.S. Department of Labor)
Aspirin and other OTC recommended items and services must be covered without cost-sharing only when prescribed by a health care provider. (Source: U.S. Department of Labor)
No. While nothing in the interim final regulations generally requires a plan or issuer that has a network of providers to provide benefits for preventive services provided out-of-network, this provision is premised on enrollees being able to access the required preventive services from in-network providers. Thus, if a plan or issuer does not have in its network a provider who can provide the particular service, then the plan or issuer must cover the item or service when performed by an out-of-network provider and not impose cost-sharing with respect to the item or service. (Source: U.S. Department of Labor)
As stated in the preamble to the HHS final regulation on standards related to essential health benefits, the Departments read PHS Act section 2707(b) as requiring all non-grandfathered group health plans to comply with the annual limitation on out-of-pocket maximums described in section 1302(c)(1) of the Affordable Care Act.
The Departments recognize that plans may utilize multiple service providers to help administer benefits (such as one third-party administrator for major medical coverage, a separate pharmacy benefit manager, and a separate managed behavioral health organization). Separate plan service providers may impose different levels of out-of-pocket limitations and may utilize different methods for crediting participants' expenses against any out-of-pocket maximums. These processes will need to be coordinated under section 1302(c)(1), which may require new regular communications between service providers.
The Departments have determined that, only for the first plan year beginning on or after January 1, 2014, where a group health plan or group health insurance issuer utilizes more than one service provider to administer benefits that are subject to the annual limitation on out-of-pocket maximums under section 2707(a) or 2707(b), the Departments will consider the annual limitation on out-of-pocket maximums to be satisfied if both of the following conditions are satisfied:
a. The plan complies with the requirements with respect to its major medical coverage (excluding, for example, prescription drug coverage and pediatric dental coverage); and
b. To the extent the plan or any health insurance coverage includes an out-of-pocket maximum on coverage that does not consist solely of major medical coverage (for example, if a separate out-of-pocket maximum applies with respect to prescription drug coverage), such out-of-pocket maximum does not exceed the dollar amounts set forth in section 1302(c)(1).
The Departments note, however, that existing regulations implementing Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) prohibit a group health plan (or health insurance coverage offered in connection with a group health plan) from applying a cumulative financial requirement or treatment limitation, such as an out-of-pocket maximum, to mental health or substance use disorder benefits that accumulates separately from any such cumulative financial requirement or treatment limitation established for medical/surgical benefits. Accordingly, under MHPAEA, plans and issuers are prohibited from imposing an annual out-of-pocket maximum on all medical/surgical benefits and a separate annual out-of-pocket maximum on all mental health and substance use disorder benefits. (Source: U.S. Department of Labor)
The HHS final regulation on standards related to essential health benefits implements the deductible provisions described in section 1302(c)(2) for non-grandfathered health insurance coverage and qualified health plans offered in the small group market, including a provision implementing section 1302(c)(2)(C) so that such small group market health insurance coverage may exceed the annual deductible limit if it cannot reasonably reach a given level of coverage (metal tier) without exceeding the deductible limit.
With respect to self-insured and large group health plans, as explained in the preamble to the HHS final regulations, the Departments intend to engage in future rulemaking to implement PHS Act section 2707(b). The Departments continue to believe that only plans and issuers in the small group market are required to comply with the deductible limit described in section 1302(c)(2).
Until that rulemaking is promulgated and effective, the Departments have determined that a self-insured or large group health plan can rely on the Departments' stated intention to apply the deductible limits imposed by section 1302(c)(2) of the Affordable Care Act only on plans and issuers in the small group market. (Source: U.S. Department of Labor)
In 2015, if an employer employs enough employees to be subject to the Employer Shared Responsibility provisions and does not offer coverage during the calendar year to at least 95% of its full-time employees, it owes an Employer Shared Responsibility payment equal to the number of full-time employees the employer employed for the year (minus 30) multiplied by $2,000, as long as at least one full-time employee receives the premium tax credit. (Note that for purposes of this calculation, a full-time employee does not include a full-time equivalent). For an employer that offers coverage for some months but not others during the calendar year, the payment is computed separately for each month for which coverage was not offered. The amount of the payment for the month equals the number of full-time employees the employer employed for the month (minus up to 30) multiplied by 1/12 of $2,000. If the employer is related to other employers, then the 30-employee exclusion is allocated among all the related employers. The payment for the calendar year is the sum of the monthly payments computed for each month for which coverage was not offered. After 2015, these rules apply to employers that do not offer coverage or that offer coverage to less than 95% of their full-time employees and the dependents of those employees. (Source: Revised by BCBSAL 10.3.2013 from IRS.gov)
The individual shared responsibility provision goes into effect in 2014. You will not have to account for coverage or exemptions or to make any payments until you file your 2014 federal income tax return in 2015. Information will be made available later about how the income tax return will take account of coverage and exemptions. Insurers will be required to provide everyone that they cover each year with information that will help them demonstrate they had coverage. (Source: IRS.gov)
No. Individuals who are not required to file a tax return for a year are automatically exempt from owing a shared responsibility payment for that year and do not need to take any further action to secure an exemption. (Source: IRS.gov)
In general, a gap in coverage that lasts less than three months qualifies as a short coverage gap. If an individual has two short coverage gaps during a year, the short coverage gap exemption only applies to the first or earlier gap. (Source: IRS.gov)
It depends upon which exemption it is.
- The religious conscience exemption and the hardship exemption are available only by going to a Health Insurance Marketplace, also known as an Affordable Insurance Exchange, and applying for an exemption certificate.
- The exemptions for members of Indian tribes, members of healthcare sharing ministries, and individuals who are incarcerated are available either by going to a Marketplace or Exchange and applying for an exemption certificate or by claiming the exemption as part of filing a federal income tax return.
- The exemptions for unaffordable coverage, short coverage gaps, and individuals who are not lawfully present in the United States can be claimed only as part of filing a federal income tax return. The exemption for those under the federal income tax return filing threshold is available automatically. No special action is needed.
Individuals are treated as having minimum essential coverage for a calendar month if they have coverage for at least one day during that month. Additionally, as long as the gap in coverage is less than three months, you may qualify for an exemption and not owe a payment. (Source: IRS.gov)
No. You will be treated as having minimum essential coverage for a month as long as you have coverage for at least one day during that month. (Source: IRS.gov)
Yes. Employer-sponsored coverage is minimum essential coverage regardless of whether the employer is a governmental, nonprofit, or for-profit entity. (Source: IRS.gov)
Yes. Retiree health plans are generally minimum essential coverage. (Source: IRS.gov)
Yes. Grandfathered group health plans provide minimum essential coverage. (Source: IRS.gov)
No. You, your spouse and your dependent children do not have to be covered under the same policy or plan. However, you, your spouse and each dependent child for whom you may claim a personal exemption on your federal income tax return must have minimum essential coverage or qualify for an exemption, or you will owe a payment when you file. (Source: IRS.gov)
Yes. Employer-sponsored coverage is generally minimum essential coverage. If an employee enrolls in employer-sponsored coverage for himself and his family, the employee and all of the covered family members have minimum essential coverage. (Source: IRS.gov)
All bona fide residents of the United States territories are treated by law as having minimum essential coverage. They are not required to take any action to comply with the individual shared responsibility provision. (Source: IRS.gov)
Yes. However, U.S. citizens who live abroad for a calendar year (or at least 330 days within a 12 month period) are treated as having minimum essential coverage for the year (or period). These are individuals who qualify for an exclusion from income under section 911 of the Code. (Source: IRS.gov)
All citizens are subject to the individual shared responsibility provision as are all permanent residents and all foreign nationals who are in the United States long enough during a calendar year to qualify as resident aliens for tax purposes. Foreign nationals who live in the United States for a short enough period that they do not become resident aliens for federal income tax purposes are not subject to the individual shared responsibility payment even though they may have to file a US income tax return. (Source: IRS.gov)
Yes. Senior citizens must have minimum essential coverage or qualify for an exemption for each month in a calendar year. Senior citizens will have minimum essential coverage for every month they are enrolled in Medicare. (Source: IRS.gov)
Yes. Each child must have minimum essential coverage or qualify for an exemption for each month in the calendar year. Otherwise, the adult or married couple who can claim the child as a dependent for federal income tax purposes will owe a payment. (Source: IRS.gov)
Most individuals in the United States have health coverage today that will count as minimum essential coverage and will not need to do anything more than continue the coverage that they have. For those who do not have coverage, who anticipate discontinuing the coverage they have currently, or who want to explore whether more affordable options are available, Health Insurance Marketplaces (also know as Affordable Insurance Exchanges) will open for every state and the District of Columbia in October of 2013. These Health Insurance Marketplaces will help qualified individuals find minimum essential coverage that fits their budget and potentially financial assistance to help with the costs of coverage beginning in 2014. The Health Insurance Marketplace will also be able to assess whether applicants are eligible for Medicaid or the Children’s Health Insurance Program (CHIP). For those who will become eligible for Medicare during 2013, enrolling for Medicare will also ensure that you have minimum essential coverage for 2014.
For those seeking an exemption, a Health Insurance Marketplace will be able to provide certificates of exemption for many of the exemption categories. HHS has proposed regulations on how a Health Insurance Marketplace will go about granting these exemptions. Individuals will also be able to claim exemptions for 2014 when they file their federal income tax returns in 2015. Individuals who are not required to file a federal income tax return are automatically exempt and do not need to take any further action to secure an exemption. (Source: IRS.gov)
1. Religious conscience: You are a member of a religious sect that is recognized as conscientiously opposed to accepting any insurance benefits. The Social Security Administration administers the process for recognizing these sects according to the criteria in the law.
2. Healthcare sharing ministry: You are a member of a recognized healthcare sharing ministry.
3. Indian tribes: You are a member of a federally recognized Indian tribe.
4. No filing requirement: Your household income is below the minimum threshold for filing a tax return. The requirement to file a federal tax return depends on your filing status, age, and types and amounts of income. To find out if you are required to file a federal tax return, use the IRS Interactive Tax Assistant (ITA) (http://www.irs.gov/uac/Do-I-Need-to-File-a-Tax-Return%3F).
5. Short coverage gap: You went without coverage for less than three consecutive months during the year.
6. Hardship: A Health Insurance Marketplace, also known as an Affordable Insurance Exchange, has certified that you have suffered a hardship that makes you unable to obtain coverage.
7. Unaffordable coverage options: You can’t afford coverage because the minimum amount you must pay for the premiums is more than eight percent of your household income.
8. Incarceration: You are in a jail, prison, or similar penal institution or correctional facility after the disposition of charges against you.
9. Not lawfully present: You are neither a U.S. citizen, a U.S. national, nor an alien lawfully present in the U.S.
Minimum essential coverage includes at a minimum all of the following:
- Employer-sponsored coverage (including COBRA coverage and retiree coverage)
- Coverage purchased in the individual market -Medicare coverage (including Medicare Advantage)
- Medicaid coverage
- Children's Health Insurance Program (CHIP) coverage
- Certain types of Veterans health coverage
Minimum essential coverage does not include specialized coverage, such as coverage only for vision care or dental care, workers' compensation, disability policies, or coverage only for a specific disease or condition.
The Department of Health and Human Services (HHS) has authority to designate additional types of coverage as minimum essential coverage. Information on additional coverage that HHS has proposed to designate as minimum essential coverage, including student health plans and coverage provided by foreign governments, is available. (Source: IRS.gov)
The provision applies to individuals of all ages, including children. The adult or married couple who can claim a child or another individual as a dependent for federal income tax purposes is responsible for making the payment if the dependent does not have coverage or an exemption. (Source: IRS.gov)
Under the Affordable Care Act, the federal government, state governments, insurers, employers, and individuals are given shared responsibility to reform and improve the availability, quality, and affordability of health insurance coverage in the United States. Starting in 2014, the individual shared responsibility provision calls for each individual to have minimum essential health coverage (known as minimum essential coverage) for each month, qualify for an exemption, or make a payment when filing his or her federal income tax return. (Source: IRS.gov)
For an employer that offers coverage to at least 95% of its full-time employees in 2015, but has one or more full-time employees who receive a premium tax credit, the payment is computed separately for each month. The amount of the payment for the month equals the number of full-time employees who receive a premium tax credit for that month multiplied by 1/12 of $3,000. The amount of the payment for any calendar month is capped at the number of the employer’s full-time employees for the month (minus up to 30) multiplied by 1/12 of $2,000. (The cap ensures that the payment for an employer that offers coverage can never exceed the payment that employer would owe if it did not offer coverage). After 2015, these rules apply to employers that offer coverage to at least 95% of full-time employees and the dependents of those employees. (Source: Revised by BCBSAL 10.3.2013 from IRS.gov)
The Employer Shared Responsibility provisions generally go into effect on January 1, 2014. Employers will use information about the employees they employ during 2013 to determine whether they employ enough employees to be subject to these new provisions in 2014. (Source: IRS.gov)
The IRS routinely works with taxpayers who owe amounts they cannot afford to pay. The law prohibits the IRS from using liens or levies to collect any payment you owe related to the individual responsibility provision, if you, your spouse or a dependent included on your tax return does not have minimum essential coverage. (Source: IRS.gov)
Yes, in 2014, grandfathered plans may not limit yearly maximums for essential health benefits or include exclusions for pre‐existing conditions, and new hire waiting periods must be limited to 90 days.
Also, dependent children up to age 26 must be eligible for coverage under the plan even if the dependent child is eligible for coverage under his/her own employer‐sponsored plan or his/her spouse’s employer‐sponsored plan.
Yes, beginning in 2013, contributions will be capped at $2,500 per year.
Yes, once information is available, groups will be required to notify their employees about the exchange.
No, at this time Governor Bentley has opted not to establish a State Exchange. Blue Cross and Blue Shield of Alabama will offer products on the Federal Exchange for eligible Alabama residents.
Employers who employ fewer than 50 full-time employees (or the equivalent combination of full-time and part-time employees) are not subject to the Employer Shared Responsibility provisions. An employer with at least 50 full-time employees (or equivalents) will not be subject to an Employer Shared Responsibility payment if the employer offers affordable health coverage that provides a minimum level of coverage to its full-time employees. (Source: IRS.gov)
The Department of Health and Human Services is developing the rules for Exchanges. (Source: IRS.gov)
The Employer Shared Responsibility provisions generally go into effect on January 1, 2015. Employers will use information about the employees they employ during 2013 to determine whether they employ enough employees to be subject to these new provisions in 2014. (Source:Revised by BCBSAL 10.3.2013 from IRS.gov)
Premium tax credits generally are available to help pay for coverage for employees who are:
- Between 100% and 400% of the federal poverty level and enroll in coverage through an Affordable Insurance Exchange,
- Are not eligible for coverage through a government-sponsored program like Medicaid or CHIP, and
- Are not eligible for coverage offered by an employer or are eligible only for employer coverage that is unaffordable or that does not provide minimum value.
Starting in 2015, employers employing at least a certain number of employees (generally 50 full-time employees and full-time equivalents) will be subject to the Employer Shared Responsibility provisions under section 4980H of the Internal Revenue Code (added to the Code by the Affordable Care Act). Under these provisions, if these employers do not offer affordable health coverage that provides a minimum level of coverage to their full-time employees, they may be subject to an Employer Shared Responsibility payment if at least one of their full-time employees receives a premium tax credit for purchasing individual coverage on one of the new Affordable Insurance Exchanges.
To be subject to these Employer Shared Responsibility provisions, an employer must have at least 50 full-time employees or a combination of full-time and part-time employees that is equivalent to at least 50 full-time employees (for example, 100 half-time employees equals 50 full-time employees).As defined by the statute, a full-time employee is an individual employed on average at least 30 hours per week (so half-time would be 15 hours per week). (Source: Revised by BCBSAL 10.3.2013 from IRS.gov)
In 2015, if an employer meets the 50 full-time employee threshold, the employer generally will be liable for an Employer Shared Responsibility payment only if:
(a) The employer does not offer health coverage or offers coverage to less than 95% of its full-time employees, and at least one of the full-time employees receives a premium tax credit to help pay for coverage on an Exchange;
(b) The employer offers health coverage to at least 95% of its full-time employees, but at least one full-time employee receives a premium tax credit to help pay for coverage on an Exchange, which may occur because the employer did not offer coverage to that employee or because the coverage the employer offered that employee was either unaffordable to the employee or did not provide minimum value.
After 2015, the rule in (a) applies to employers that do not offer health coverage or that offer coverage to less than 95% of their full-time employees and the dependents of those employees.
(Source: Revised by BCBSAL 10.3.2013 from IRS.gov)
Yes. Taxpayers may rely on the proposed regulations for purposes of compliance with the Employer Shared Responsibility provisions. If the final regulations are more restrictive than the guidance in the proposed regulations, the final regulations will be applied prospectively, and employers will be given sufficient time to come into compliance with the final regulations. (Source: IRS.gov)
Yes. Rather than being required to use the full twelve months of 2013 to measure whether it has 50 full-time employees (or an equivalent number of part-time and full-time employees), an employer may measure using any six-consecutive-month period in 2013. So, for example, an employer could use the period from January 1, 2013, through June 30, 2013, and then have six months to analyze the results, determine whether it needs to offer a plan, and, if so, choose and establish a plan. (Source: IRS.gov)
Yes. Treasury and the IRS have proposed regulations on the new Employer Shared Responsibility provisions. Comments on the proposed regulations may be submitted by mail, electronically, or hand-delivered, and are due by March 18, 2013. (Source: IRS.gov)
Yes, consistent with longstanding standards that apply for other tax and employee benefit purposes, companies that have a common owner or are otherwise related generally are combined together for purposes of determining whether or not they employ at least 50 full-time employees (or an equivalent combination of full-time and part-time employees). If the combined total meets the threshold, then each separate company is subject to the Employer Shared Responsibility provisions, even those companies that individually do not employ enough employees to meet the threshold. (The rules for combining related employers do not apply for purposes of determining whether an employer owes an Employer Shared Responsibility payment or the amount of any payment). The proposed regulations provide information on the rules for determining whether companies are related and how they are applied for purposes of the Employer Shared Responsibility provisions. (Source: IRS.gov)
The proposed regulations provide a method to employers for determining in advance whether or not an employee is to be treated as a full-time employee, based on the hours of service credited to the employee during a previous period. Using this look-back method to measure hours of service, the employer will know the employee’s status as a full-time employee at the time the employer would offer coverage. The proposed regulations are consistent with IRS notices that have previously been issued and describe approaches that can be used for various circumstances, such as for employees who work variable hour schedules, seasonal employees, and teachers who have time off between school years. (Source: IRS.gov)
For an employer that offers coverage to at least 95% of its full-time employees in 2014, but has one or more full-time employees who receive a premium tax credit, the payment is computed separately for each month. The amount of the payment for the month equals the number of full-time employees who receive a premium tax credit for that month multiplied by 1/12 of $3,000. The amount of the payment for any calendar month is capped at the number of the employer’s full-time employees for the month (minus up to 30) multiplied by 1/12 of $2,000. (The cap ensures that the payment for an employer that offers coverage can never exceed the payment that employer would owe if it did not offer coverage). After 2014, these rules apply to employers that offer coverage to at least 95% of full-time employees and the dependents of those employees. (Source: IRS.gov)
No. The rules for how eligibility for employer-sponsored insurance affects eligibility for the premium tax credit are the same, regardless of whether the employer employs enough employees to be subject to the Employer Shared Responsibility provisions. (Source: IRS.gov)
For an employer that as of December 27, 2012, already offers health coverage through a plan that operates on a fiscal year (a fiscal year plan), transition relief is available. First, for any employees who are eligible to participate in the plan under its terms as of December 27, 2012 (whether or not they take the coverage), the employer will not be subject to a potential payment until the first day of the fiscal plan year starting in 2014. Second, if
(a) the fiscal year plan (including any other fiscal year plans that have the same plan year) was offered to at least one third of the employer’s employees (full-time and part-time) at the most recent open season or
(b) the fiscal year plan covered at least one quarter of the employer’s employees, then the employer also will not be subject to the Employer Shared Responsibility payment with respect to any of its full-time employees until the first day of the fiscal plan year starting in 2014, provided that those full-time employees are offered affordable coverage that provides minimum value no later than that first day.
So, for example, if during the most recent open season preceding December 27, 2012, an employer offered coverage under a fiscal year plan with a plan year starting on July 1, 2013 to at least one third of its employees (meeting the threshold for the additional relief), the employer could avoid liability for a payment if, by July 1, 2014, it expanded the plan to offer coverage satisfying the Employer Shared Responsibility provisions to the full-time employees who had not been offered coverage. For purposes of determining whether the plan covers at least one quarter of the employer’s employees, an employer may look at any day between October 31, 2012 and December 27, 2012. (Source: IRS.gov)
To be subject to the Employer Shared Responsibility provisions, an employer must employ at least 50 full-time employees or a combination of full-time and part-time employees that equals at least 50 (for example, 40 full-time employees employed 30 or more hours per week on average plus 20 half-time employees employed 15 hours per week on average are equivalent to 50 full-time employees). Employers will determine each year, based on their current number of employees, whether they will be considered a large employer for the next year. For example, if an employer has at least 50 full-time employees, (including full-time equivalents) for 2013, it will be considered a large employer for 2014.
Employers average their number of employees across the months in the year to see whether they meet the large employer threshold. The averaging can take account of fluctuations that many employers may experience in their work force across the year. For those employers that may be close to the 50 full-time employee (or equivalents) threshold and need to know what to do for 2014, special transition relief is available to help them count their employees in 2013. The proposed regulations provide additional information about how to determine the average number of employees for a year, including information about how to take account of salaried employees who may not clock their hours and a special rule for seasonal workers. (Source: IRS.gov)
If it is determined that an employer is liable for an Employer Shared Responsibility payment after the employer has responded to the initial IRS contact, the IRS will send a notice and demand for payment. That notice will instruct the employer on how to make the payment. Employers will not be required to include the Employer Shared Responsibility payment on any tax return that they file. (Source: IRS.gov)
The IRS will contact employers to inform them of their potential liability and provide them an opportunity to respond before any liability is assessed or notice and demand for payment is made. The contact for a given calendar year will not occur until after employees’ individual tax returns are due for that year claiming premium tax credits and after the due date for employers that meet the 50 full-time employee (plus full-time equivalents) threshold to file the information returns identifying their full-time employees and describing the coverage that was offered (if any). (Source: IRS.gov)
A minimum value calculator will be made available by the IRS and the Department of Health and Human Services (HHS). The minimum value calculator will work in a similar fashion to the actuarial value calculator that HHS is making available. Employers can input certain information about the plan, such as deductibles and co-pays, into the calculator and get a determination as to whether the plan provides minimum value by covering at least 60 percent of the total allowed cost of benefits that are expected to be incurred under the plan. (Source: IRS.gov)
If an employee’s share of the premium for employer-provided coverage would cost the employee more than 9.5% of that employee’s annual household income, the coverage is not considered affordable for that employee. If an employer offers multiple healthcare coverage options, the affordability test applies to the lowest-cost option available to the employee that also meets the minimum value requirement.
Because employers generally will not know their employees’ household incomes, employers can take advantage of one of the affordability safe harbors set forth in the proposed regulations. Under the safe harbors, an employer can avoid a payment if the cost of the coverage to the employee would not exceed 9.5% of the wages the employer pays the employee that year, as reported in Box 1 of Form W-2, or if the coverage satisfies either of two other design-based affordability safe harbors. (Source: IRS.gov)
All employers that employ at least 50 full-time employees or an equivalent combination of full-time and part-time employees are subject to the Employer Shared Responsibility provisions, including for-profit, non-profit, and government entity employers. (Source: IRS.gov)
Yes, beginning with Form W‐2s to be issued in January 2013, healthcare reform requires employers (who file 250 or more Form W‐2s) to report the cost of employer‐sponsored health coverage (Box 12 of Form W‐2). This Form W‐2 reporting is for informational purposes only and does not mean that the cost of such health coverage is taxable.
The Form W‐2 Reporting of Employer‐Sponsored Health Coverage chart, located at www.irs.gov,describes the types of coverage that employers must report on Form W‐2. Detailed information about the employer’s requirement to report the aggregate cost of an employee’s healthcare benefits on Form W‐2 can be found in the instructions for the 2012 Form W‐2.
Yes, small businesses that employ fewer than 25 full‐time equivalent (FTE) employees, pay annual average wages of less than $50,000, and contribute an amount equal to at least 50% of the cost of employee‐only coverage may be eligible for the tax credit.
For purposes of determining whether an employer meets the 50 full-time employee (or full-time employees and full-time employee equivalents) threshold, an employer generally will take into account only work performed in the United States. For example, if a foreign employer has a large workforce worldwide, but less than 50 full-time (or equivalent) employees in the United States, the foreign employer generally would not be subject to the Employer Shared Responsibility provisions. (Source: IRS.gov)
Yes, if information reflected in the Summary of Benefits and Coverage (SBC) changes during the year other than in connection with a renewal, a Notice of Material Modification must be provided no later than 60 days prior to the effective date of the change. A revised SBC can serve as the Notice of Material Modification.