Consumers who abandoned the Obamacare exchanges this year are entitled to a “hardship” exemption to the individual mandate penalty, CMS publicized Wednesday. This will directly affect people who chose to go uninsured or who enrolled in coverage that doesn’t comply with Obamacare protocols. This follows the agency’s April guidance that expanded the exemption to people who live in rural counties or have claims going back to 2016, but applicants still had to give a written explanation for why they required the exemption.
The administration established broad restrictions on the hardship, including an abrupt shift in personal or domestic finances or financial duress that would make the cost of an exchange plan unreasonable.
“Of the $3 billion … collected from taxpayers in individual mandate penalties in 2015, over 5 million households, or nearly 80%, earned $50,000 a year or less,” according to the CMS’ press release.
On Wednesday, the CMS declared its newest guidance regarding helping families of lower-middle class who opted out of coverage on the exchanges, and said it followed President Trump’s executive order from 2017. This obligated agencies to “minimize the unwarranted regulatory and economic burdens” of the Affordable Care Act.
“Today’s announcement shows how President Trump’s Administration is working to ease the burden of Obamacare.” said CMS Administrator Seema Verma. “Although the tax cuts signed by the president earlier this year eliminate the mandate penalty starting in 2019, Americans are still under threat of the penalty for this tax year of 2018. This guidance will simplify how consumers claim the hardship exemption from the individual mandate directly on their tax return.”
Digging deeper, this new guidance unveils additional details on how the Agency is making it easier for taxpayers to claim a hardship exemption on a federal income tax return without presenting documentation.
To see the guidance issued Wednesday, please go to: https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Authority-to-Grant-HS-Exemptions-2018-Final-91218.pdf
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