The Treasury Department as well as the Internal Revenue Service (IRS) and U.S. Department of Health and Human Services Centers for Medicare and Medicaid Services (CMS) released proposed regulations addressing the Affordable Care Act individual mandate requirement.  The regulations explain the shared responsibility provision (the individual mandate) and lay out eligibility requirements for receiving an exception, including the process individuals may use to receive certificates of exemption from the mandate.

According to CMS, the proposed rules will ease implementation and help to ensure that the payment applies only to the limited group of taxpayers who choose to spend a substantial period of time without coverage despite having ready access to affordable coverage.  In its fact sheet, CMS explains that the shared responsibility payment should not apply to any taxpayer for whom coverage is unaffordable, who has other good cause for going without coverage, or who goes without coverage for only a short time. 

Highlights of the proposed rule include:

• Clarification of the hardship exemption to protect taxpayers and enumerate situations that will always allow for an exemption;
• Calculation of partial-month coverage counts for the month – an individual is treated as having coverage for a month so long as the individual has coverage for any one day of that month;
• Waiver of payment for the first part of the coverage gap spanning multiple years;
• Description of the minimum statutory categories for minimum essential coverage; and
• Specific rules and process for receiving an exemption from the mandate.