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The Wagner Law Group Description 

The Wagner Law Group, A Professional Corporation, is a nationally recognized ERISA & employee benefits, estate planning, employment, labor & human resources practice. 


Established in 1996, The Wagner Law Group has 22 attorneys engaged exclusively in employee benefits, estate planning and employment law. Five of our attorneys are AV rated by Martindale-Hubbell as having very high to preeminent legal abilities and ethical standards. The firm is among the largest ERISA boutiques in the country. Our practice is national in scope, with clients in more than 40 states and several foreign countries.



Contact Info

The Wagner Law Group


  Integrity | Excellence


Massachusetts Office 

Tel: (617) 357-5200 

Fax: (617) 357-5250 

99 Summer Street 

13th Floor

Boston, MA 02110

Florida Office 

Tel: (561) 293-3590
Fax: (561) 293-3591
7108 Fairway Drive
Suite 125
Palm Beach Gardens, FL 33418


San Francisco Office

Tel: (415) 625-0002

Fax: (415) 829-4385

315 Montgomery Street

Suite 902

San Francisco, CA 94104





February 14, 2013 

 State and Federal Law Alert


Individual Shared Responsibility Penalty 


The IRS has issued proposed regulations addressing the individual shared responsibility provision contained in the Patient Protection and Affordable Care Act ("PPACA"). Beginning in 2014, PPACA's individual shared responsibility provision requires individuals either to be insured by "minimum essential coverage" or to pay a penalty on their federal tax returns. This Alert focuses on the sections of the proposed regulations that address: (i) the definition of minimum essential coverage; (ii) how the shared responsibility penalty will be calculated and paid; and (iii) who is exempt from paying the penalty.


Minimum Essential Coverage. For purposes of the shared responsibility penalty, an individual is considered to have minimum essential coverage for any month in which he or she is enrolled in one of the following types of coverage for at least one day: 

  • Employer-sponsored coverage (including COBRA and retiree coverage);
  • Coverage purchased in the individual market; or
  • Government-sponsored coverage, such as Medicare, Medicaid, the Children's Health Insurance Program, or TRICARE. 

Minimum essential coverage does not include specialized coverage such as vision care or dental care, workers' compensation, disability policies, or coverage for a specific disease or condition. Interestingly, the definition of minimum essential coverage for the shared responsibility penalty differs from the definition of the same term for the employer pay-or-play penalty. (See the Alert of 1/17/13.)


Calculating Shared Responsibility Penalty. The penalty is the greater of: a flat dollar amount; or a specific percentage of income. For 2014, the penalty amount will be the greater of $95 per adult and $47.50 per child under age 18 (maximum of $285 per family) or 1% of income over the tax-filing threshold (currently, $19,500 for a 2012 joint return).


The 2014 shared responsibility penalties are payable when individuals file their 2014 federal income tax returns in 2015. If the penalty applies for less than a full calendar year, it is prorated to 1/12 of the annual penalty for each month without coverage.


Exemptions from Shared Responsibility Penalties. PPACA provides certain statutory exemptions from the minimum essential coverage requirement. Individuals who meet the following criteria are exempt from paying the shared responsibility penalty: 

  • Members of religious organizations that object to coverage on religious principles;
  • Members of health care sharing ministries (i.e., non-profit religious organizations where members share medical costs);
  • Members of federally recognized Indian tribes;
  • Individuals with incomes below the minimum threshold for filing a tax return;
  • Individuals who have a gap in minimum essential coverage for less than three consecutive calendar months in a year;
  • Individuals who qualify for a hardship exemption;
  • Individuals who cannot afford coverage because their required contribution towards minimum essential coverage exceeds 8% of their annual household income;
  • Individuals who are incarcerated; and
  • Individuals not lawfully present in the United States. 

U.S. citizens residing in a foreign country are also generally exempt from the shared responsibility penalty if they meet certain requirements, such as living abroad for the entire calendar year.


This Newsletter is protected by copyright. Material appearing herein may be reproduced with appropriate credit.


Pursuant to Internal Revenue Service Circular 230, we hereby inform you that any advice set forth herein with respect to US federal tax issues is not intended or written by The Wagner Law Group to be used and cannot be used, by you or any taxpayer, for the purpose of avoiding penalties that may be imposed on you or any other person under the Internal Revenue Code.


This Newsletter is provided for information purposes by The Wagner Law Group to clients and others who may be interested in the subject matter, and may not be relied upon as specific legal advice.  This material is not to be construed as legal advice or legal opinions on specific facts. Under the Rules of the Supreme Judicial Court of Massachusetts, this material may be considered advertising.