Doug Frankel
Division Manager
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Statement on The Shared Responsibility Payment

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  • There has been confusion in the marketplace about whether or not the IRS will accept tax returns with the health insurance attestation question unanswered. You should consult with your accountant to get professional guidance on your best course of action.

  • As of this date the ACA’s requirement to carry Minimum Essential Coverage (MEC) is still the law of the land and it still has a provision that could impose a “Shared Responsibility Payment” (tax penalty) for those that fail to meet that requirement.

  • In 2017 the penalty was either a flat rate of $695 per adult + $347.50 per child with a maximum of $2085 per family or 2.5% of your household Adjusted Gross Income, whichever is higher. If the percentage is higher than the flat rate it is capped at the cost of the lowest ACA Bronze Plan in your area. For the 2018 tax year and beyond the penalty will remain at 2.5%, but the flat and maximum amounts will adjust for inflation.

  • If you owe a penalty, it will be taken from your tax refund. Unlike nonpayment of child support or other activities, the federal law prohibits the government from garnishing your wages or filing liens to collect an insurance penalty.

Your options for dealing with this situation are as follows:

  • Enroll in a qualified ACA plan and meet the requirement according to the letter of the law.

  • Qualify and purchase an alternative non-ACA plan which may result in reduced premiums and/or reduced benefits and bear the responsibility of any potential tax penalty.

  • You could qualify for an “Unaffordable Exemption” from the “Shared Responsibility Payment” if the cost of the lowest priced Bronze ACA plan in your area is more than 8.05% of your income.

  • Enroll in an approved Healthcare Sharing Ministry Plan and gain an exemption form the ACA requirement.

  • Enroll in a qualified “Minimum Essential Coverage” (MEC) plan.

  • It is my duty to inform you of this information but it is not my responsibility to advise you on what to do. That decision has to be made by you with the assistance and guidance of your accounting and tax professional.