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Obamacare penalty for few in some niche government plans: IRS
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[January 24, 2014]
WASHINGTON (Reuters)
— The Obama administration
on Thursday said people enrolled in some small, government-sponsored
healthcare plans will not face a penalty under Obamacare in 2014,
even though their coverage does not meet the healthcare reform law's
minimum requirements.
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 In proposed rules released by the Internal Revenue
Service, the administration said narrowly defined government
coverage including programs limited to family planning or
tuberculosis-related services through Medicaid do not meet minimum
essential coverage standards.
Ordinarily, President Barack Obama's Patient Protection and
Affordable Care Act would require someone who lacks minimum coverage
to pay a penalty.
But the IRS is proposing that individuals in certain plans pay no
penalty for failing to have minimum essential healthcare for this
year. These individuals may be eligible for a premium tax credit to
get healthcare coverage on a state or federal health insurance
marketplace, the proposed rules said.
The exemption includes people deemed medically needy due to
crippling healthcare costs, enrollees in special Medicaid
demonstrations and military personnel enrolled in programs with
limited eligibility.
The announcement comes on the heels of an administration decision to
offer hardship exemptions to people who had their individual
policies canceled last year because they fail to meet Obamacare's
standards for minimum coverage. That decision was part of the
administration's response to a public outcry that devastated Obama's
poll numbers and worried Democratic lawmakers.
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But Thursday's proposed rules, which would affect a small but
undetermined number of people, have been in the works since at least
last August, when the IRS published regulations on the individual
mandate.
Obamacare requires most Americans to be enrolled in health coverage
by March 31 or pay a 2014 penalty of $95 or 1 percent of annual
household income, whichever is higher. The penalty is scheduled to
rise in subsequent years.
(Reporting by Patrick Temple-West;
editing by Eric Walsh)
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