Tracy Grady
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Tracy Grady on August 2, 2018

Health Insurance Penalties Remain in Massachusetts: What You Need to Know

Health insurance has undergone a lot of changes in recent years, which has created quite a bit of confusion. One of the hot topics right now is President Trump’s attempt to repeal Obamacare. While federal health insurance penalties will be lifted for most Americans in 2019, this isn’t true for those residing in Massachusetts where the individual mandate remains state law.

 

Changes to the ACA

Starting back in 2014, the Affordable Care Act (ACA) required individuals to pay a penalty for not having health insurance coverage. The main goal was to encourage more people to buy health insurance so that they had at least minimum coverage. However, that will change for most Americans in 2019 due to a repeal that was set into place by the Trump Administration. Dan Morgan reports in CNBC saying, “The tax penalty for not having coverage will be suspended effective in 2019.”

He also references a quote given by Trump himself explaining the logic behind this move.”We eliminated an especially cruel tax that fell mostly on Americans making less than $50,000 a year — forcing them to pay tremendous penalties simply because they could not afford government-ordered health plans.”

 

A Caveat

While it’s true that the majority of Americans are no longer subject to health insurance penalties in 2019, this isn’t the case for Massachusetts residents. Individuals who lack creditable coverage will continue to pay a penalty in 2019 and beyond. Note that some other states are considering making the same move and reinstating the individual mandate.

This means that in Massachusetts things will basically continue on like they had been under the Obama administration. Specific penalties for 2019 have yet to be released but should be made available early next year. One thing we do know right now is that the penalty can’t exceed 50 percent of the least costly available insurance premium that a person would have qualified for through the commonwealth’s Health Connector.

Martha Bebinger adds on the website of Boston radio station WBUR that these penalties will only apply to Massachusetts adults 18 years of age or older who are able to afford health insurance but fail to enroll in available coverage.

 

Notifying Your Employees

The bottom line is that the health insurance individual mandate will remain in effect in the state of Massachusetts moving forward. However, instead of it being an ACA penalty, it will strictly be a Massachusetts penalty. If you’re a Massachusetts-based business, you’ll want to let your employees know about this update as soon as possible so they can plan ahead for 2019. This should give them enough time to figure out the best course of action regarding their healthcare moving forward.

This recent event is certainly something to be aware of, especially with talks of penalties dropping across most of America. If your business is located in Massachusetts, this can have a considerable impact on how you approach healthcare in 2019 and beyond. For more information on the individual mandate along with relevant resources, visit this page from Mass.gov.