Will You Be Penalized For Not Having Health Insurance This Tax Season?
The U.S. Internal Revenue Service said last week that it would process tax returns even if taxpayers fail to check the box indicating whether they have health insurance coverage. Maintaining health insurance coverage — the so-called individual mandate — is a key requirement of the controversial health reform law. Beginning this tax season, the IRS had planned to automatically reject returns that omitted taxpayers’ health insurance status. After considering President Donald Trump’s Jan. 20 executive order to ease the financial burden of the mandate, the agency said it decided to reverse course.
“This is probably a fairly minor, incremental undercutting of the individual mandate or the insurance market more broadly,” said Jason Lacey, a tax and health care attorney in Wichita, Kansas.
Chris Sloan, a senior manager at the consulting firm Avalere Health, offered a similar perspective.
“For the market as a whole, I think there’s a question of how much impact this is going to have,” Sloan said.
The IRS announcement coincided with the release of a Trump administration proposal aimed at keeping health insurers in the ACA insurance exchanges for 2018. The proposed rules would shorten the open-enrollment period and make it harder for people to sign up outside of that enrollment window, among other changes.
America’s Health Insurance Plans, a national trade association representing the health insurance community, commended the Trump administration for taking steps to stabilize and improve the individual marketplace for 2018.
But, a day earlier, the health insurance giant Humana Inc. said it would exit from all Affordable Care Act markets in 2018.