Please read my note at bottom if you are using these at a townhall:
Today’s edition relates to the individual mandate for you to carry health insurance as of Jan. 1, 2013, which is in Section 401 of H.R. 3200.
In General- Subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new part:
Subpart a. tax on individuals without acceptable health care coverage.
‘Subpart A–Tax on Individuals Without Acceptable Health Care Coverage
‘Sec. 59B. Tax on individuals without acceptable health care coverage.
Sec. 59b. tax on individuals without acceptable health care coverage.
‘(a) Tax Imposed- In the case of any individual who does not meet the requirements of subsection (d) at any time during the taxable year, there is hereby imposed a tax equal to 2.5 percent of the excess of–
‘(1) the taxpayer’s modified adjusted gross income for the taxable year, over
‘(2) the amount of gross income specified in section 6012(a)(1) with respect to the taxpayer.
‘(1) TAX LIMITED TO AVERAGE PREMIUM-
‘(A) IN GENERAL- The tax imposed under subsection (a) with respect to any taxpayer for any taxable year shall not exceed the applicable national average premium for such taxable year.
‘(B) APPLICABLE NATIONAL AVERAGE PREMIUM-
‘(i) IN GENERAL- For purposes of subparagraph (A), the ‘applicable national average premium’ means, with respect to any taxable year, the average premium (as determined by the Secretary, in coordination with the Health Choices Commissioner) for self-only coverage under a basic plan which is offered in a Health Insurance Exchange for the calendar year in which such taxable year begins.
‘(ii) FAILURE TO PROVIDE COVERAGE FOR MORE THAN ONE INDIVIDUAL- In the case of any taxpayer who fails to meet the requirements of subsection (e) with respect to more than one individual during the taxable year, clause (i) shall be applied by substituting ‘family coverage’ for ‘self-only coverage’.
2) PRORATION FOR PART YEAR FAILURES- The tax imposed under subsection (a) with respect to any taxpayer for any taxable year shall not exceed the amount which bears the same ratio to the amount of tax so imposed (determined without regard to this paragraph and after application of paragraph (1)) as–
‘(A) the aggregate periods during such taxable year for which such individual failed to meet the requirements of subsection (d), bears to
‘(B) the entire taxable year.
I could quote more, but if you are preparing for this you should read the section link above. Here are questions for your congressperson or Senator regarding Sec. 401.
- If my adult child is a dependent of mine, am I required under HR 3200 to buy insurance for her or him?
- If I become unemployed at any time during a year, am I required to get a qualified plan or enter a government plan to avoid this tax? (It appears this proration clause I ended on does impose that requirement. If someone can find a place where it says you’re not taxed, please point me in the right direction.)
- If I am a millionaire and I choose to self-insure, am I required to pay both the 2.5% tax (which, you will note, is capped at average insurance premiums as determined by your Health Choice Commissioner) and the 5.4% surcharge in Sec. 441? Do you have an estimate of the amount of legal tax avoidance that will occur if you raise taxes by that amount?
- Who is required to document that I have the appropriate coverage? (This will be a test of whether they read 401. It’s up to the Treasury Secretary. Follow the link for the exact language.) Doesn’t this increase in paperwork defeat the purposes of cost control?