The most recent tax cut approved by the US Congress late last year know as the Tax Cuts and Jobs Act removed the federal penalty for not having health insurance – the individual mandate. Since then, officials from many states have been concerned that the elimination of the penalty might have a destabilizing impact on their local health insurance marketplaces. To combat this some States have and others are looking at instituting their own individual mandate programs.
States with Mandates:
Massachusetts was the first state and actually had an individual mandate in place before the Affordable Care Act when into law. The penalty amount varies by income with a maximum penalty of just under $1,500 per year.
New Jersey recently passed a new law which goes into effect in 2019. Their penalty is based on per adult+child amount (695/347.50) or 2.5% of household income whichever is the greater. The total is capped at the premiums of the lowest rate plan in their marketplace
Vermont also passed a new law, but it will not go into effect until 2020. The details of this new law are not known yet as the State Legislature will be working out the details durin 2019.
Several states are considering instituting some form of the mandate. These include California, Connecticut, Maryland, Hawaii, Rode Island, Washington, Minnesota and the District of Columbia. Other states are unknown at this time but all the signs point to additional states climbing on board in the very near future.
If you have any questions or would like to discuss this impact on your business, please do not hesitate to contact us. Please also stay tuned to our blog posts and we will update you as soon as we know of changes in this changing landscape.