Vision Payroll

This week’s question comes from Janine, an office manager. We are a Massachusetts employer with some employees who have chosen not to participate in the company health insurance plan. What are the penalties for not having health insurance in 2010? Answer: The Massachusetts Department of Revenue (the Department)  has released a working draft Technical Information Release 09-XX, Individual Mandate Penalties for Tax Year 2010. In this working draft, the proposed penalties are as follows:

• Individuals with incomes up to 150% of the Federal Poverty Level are not subject to any penalty for non-compliance, as those at this income level are not required to pay an enrollee premium for Commonwealth Care health insurance.
• Penalties for individuals with incomes from 150% to 300% of the Federal Poverty Level will be half of the lowest priced Commonwealth Care enrollee premium that could be charged to an individual at the corresponding income level, based on the Connector’s Commonwealth Care enrollee premiums as of January 1, 2010.
• Penalties for individuals with incomes greater than 300% of the Federal Poverty Level will be:

Ages 18-26: half of the lowest priced Commonwealth Choice Young Adult Plan premium; and

Ages 27 and above: half of the lowest priced Commonwealth Choice Bronze premium, based on the Connector’s prices for these plans as of January 1, 2010.

• The Department anticipates issuing an updated penalty schedule for tax year 2011.
• Penalties for married couples who do not comply with the individual mandate rules (with or without children) will equal the sum of individual penalties for each spouse.

Contact Vision Payroll if you have any questions on the working draft of Information Release 09-XX, Individual Mandate Penalties for Tax Year 2010.

The Commonwealth of Massachusetts Department of Revenue has released a working draft of TIR 09-1, Individual Mandate Penalties for Tax Year 2009, which would provide the penalties in 2009 for adults without health insurance. Under the working draft, adults with annual family household incomes of 150% of the Federal Poverty Level or less are not subject to any penalty. Adults with annual family household incomes of more than 150% but not more than 200% of the Federal Poverty Level are subject to a penalty of $17 per month for each month of non-compliance. Adults with annual family household incomes of more than 200% but not more than 250% of the Federal Poverty Level are subject to a penalty of $35 per month for each month of non-compliance. Adults with annual family household incomes of more than 250% but not more than 300% of the Federal Poverty Level are subject to a penalty of $52 per month for each month of non-compliance. Adults aged 18-26 with annual family household incomes of more than 300% of the Federal Poverty Level are subject to a penalty of $52 per month for each month of non-compliance. Adults aged 27 and older with annual family household incomes of more than 300% of the Federal Poverty Level are subject to a penalty of $89 per month for each month of non-compliance. The TIR provides the annual income standards for the Federal Poverty Level by family size. Qualifying coverage is defined as enrollment “in health insurance policies that meet minimum creditable coverage standards adopted by the Commonwealth Health Insurance Connector Authority.” Written comments for the working draft are due by January 23, 2009. Contact Vision Payroll if you have any questions on TIR 09-1 or need a referral to a licensed benefits broker.