The IRS has issued guidance
providing transitional relief from the individual mandate penalty
contained in the Patient Protection and Affordable Care Act
("PPACA"). This relief is limited to employees of employers
that sponsor non-calendar year group health plans.
PPACA's individual mandate
requires all non-exempt taxpayers to maintain minimum essential
coverage effective January 1, 2014. Taxpayers who fail to obtain
minimum essential coverage by this date will be assessed a penalty
equal to the greater of a flat dollar amount or a percentage of the
taxpayer's annual income above the tax-filing threshold.
The transitional relief
allows employees and their spouses and dependents who are eligible to
enroll in their employer's non-calendar year health plan to avoid
individual mandate penalties for the months between January 1, 2014,
and the month in which the employer's 2014 plan year begins.
Massachusetts' Fair Share
Penalty Repealed Despite Delay in Employer Mandate
On July 3, 2013, the
Massachusetts Senate passed legislation repealing the state's Fair
Share Employer Contribution law, effective immediately. The
Massachusetts Fair Share Employer Contribution law, which was the
state's version of the employer mandate, required employers with
eleven or more Massachusetts full time equivalent employees to offer
subsidized health care coverage to employees or pay a $295 penalty
per full-time equivalent employee.
administration originally had agreed to eliminate the state's Fair
Share Employer Contribution law because PPACA's employer mandate was
set to take effect in January 2014. Following the Obama
administration's announcement of a one-year delay in the effective
date of PPACA's employer mandate, Governor Patrick commented that he
would still not block the repeal of the state's employer mandate.
On July 12, 2013, Governor
Patrick held true to his word and signed legislation repealing the
Massachusetts Fair Share Employer Contribution law.