This week’s question comes from Janine, an office manager. We are a Massachusetts employer with some employees who have chosen not to participate in the company health insurance plan. What are the penalties for not having health insurance in 2010? Answer: The Massachusetts Department of Revenue (the Department)  has released a working draft Technical Information Release 09-XX, Individual Mandate Penalties for Tax Year 2010. In this working draft, the proposed penalties are as follows:

• Individuals with incomes up to 150% of the Federal Poverty Level are not subject to any penalty for non-compliance, as those at this income level are not required to pay an enrollee premium for Commonwealth Care health insurance.
• Penalties for individuals with incomes from 150% to 300% of the Federal Poverty Level will be half of the lowest priced Commonwealth Care enrollee premium that could be charged to an individual at the corresponding income level, based on the Connector’s Commonwealth Care enrollee premiums as of January 1, 2010.
• Penalties for individuals with incomes greater than 300% of the Federal Poverty Level will be:

Ages 18-26: half of the lowest priced Commonwealth Choice Young Adult Plan premium; and

Ages 27 and above: half of the lowest priced Commonwealth Choice Bronze premium, based on the Connector’s prices for these plans as of January 1, 2010.

• The Department anticipates issuing an updated penalty schedule for tax year 2011.
• Penalties for married couples who do not comply with the individual mandate rules (with or without children) will equal the sum of individual penalties for each spouse.

Contact Vision Payroll if you have any questions on the working draft of Information Release 09-XX, Individual Mandate Penalties for Tax Year 2010.