Individual Mandate: Affordability Exemption
HHS Issues Final Notice of Benefit and Payment Parameters for 2016
Under the ACA, individuals who lack access to affordable minimum essential coverage (MEC) are exempt from the individual mandate. For purposes of this exemption, coverage is affordable for an employee if the required contribution for the lowest-cost, self-only coverage does not exceed 8 percent of household income. This required contribution percentage is adjusted annually after 2014.
• For 2015, coverage is unaffordable for purposes of the individual mandate exemption if it exceeds 8.05 percent of household income.
• For 2016, the final rule provides that, if an individual must pay more than 8.13 percent of his or her household income for MEC, that individual is exempt from the individual mandate penalty.
On Feb. 27, 2015, the Department of Health and Human Services (HHS) published its final Notice of Benefit and Payment Parameters for 2016. This final rule describes benefit and payment parameters applicable to the 2016 benefit year, including standards relating to:
• The reinsurance program’s annual contribution rate for 2016.
• The 2016 open enrollment period.
• The 2016 annual limitations on cost-sharing.