District of Columbia becomes fourth* state** to reinstate ACA individual mandate!
2018 MIDTERM ELECTION
Time: D H M S
*(technically Vermont was the third to do so, but theirs doesn't kick into effect until 2020, and they haven't even crystalized exactly what form it would take anyway.)
**(yeah, I know very well that DC isn't actually a state, but it's pretty awkward to put "state and/or territory" in the headline.)
I realize that 110% of the news/media/political attention is on the bombshell announcement that Supreme Court Justice Anthony Kennedy is retiring at the end of July, but there are other things going on as well, so I'll do my best to soldier on...
More big health care action at the state level: yesterday the DC Council passed what would be the nation's third state-level individual mandate, after Mass. and NJ.https://t.co/BmtnDAQvVp
— Jason A. Levitis (@jasonlevitis) June 27, 2018
I actually wrote about this back in February, when the executive board of the DC ACA exchange unanimously voted to reinstate the mandate. It didn't mean all that much at the time, however, because the authority to reinstate it actually belongs to the DC Council.
Well, thanks to Mr. Levitis for the heads up. If you scroll down to Page 138, you can see that the DC Council has indeed done just that:
TITLE V. HEALTH AND HUMAN SERVICES
SUBTITLE A. INDIVIDUAL HEALTH INSURANCE REQUIREMENT
Sec. 5001. Short title.
This subtitle may be cited as the “Health Insurance Requirement Amendment Act of 2018”.
Sec. 5002. Title 47 of the District of Columbia Official Code is amended as follows:
(a) The table of contents is amended by adding a new chapter designation to read as follows:
“51. Individual Taxpayer Health Insurance Responsibility Requirement”.
(b) A new Chapter 51 is added to read as follows:
“CHAPTER 51. INDIVIDUAL TAXPAYER HEALTH INSURANCE RESPONSIBILITY REQUIREMENT.
It goes on for like a dozen pages with the exact legalese covering all the bases (definition of terms, exemptions, etc).
The last part is kind of interesting--instead of specifically spelling out what the penalty itself actually is ($695 per adult/$347.50 per child or 2.5% of household income), the legislative text simply refers to the penalty being based on the federal IRS Code as of December 15, 2017.
Republicans in Congress voted to change the ACA's mandate penalty to $0.00 or 0.0% of income four days later, of course:
“§ 47-5108. Liability.
“(a) A taxpayer who fails to pay the District of Columbia shared responsibility payment imposed by § 47-5003 shall be subject to all collection, enforcement, and administrative provisions applicable to unpaid taxes or fees, as provided in Chapter 18, Chapter 41, Chapter 42, Chapter 43, and Chapter 44 of this title.
“(b) Upon application by the taxpayer, the Chief Financial Officer may abate the shared responsibility payment for good cause.
“§ 47-5109. Rules.
“(a)(1) All federal regulations implementing section 5000A of the Internal Revenue Code of 1986, as such regulations were in effect on December 15, 2017, are incorporated into the District of Columbia Municipal Regulations. Federal guidance interpreting the federal regulations implementing section 5000A of the Internal Revenue Code of 1986, as such guidance was in effect on December 15, 2017, shall also apply.
Mr. Levitis has also confirmed that unlike Vermont's penalty, the DC one would go into effect as of January 1, 2019, which means no penalty gap.
Also, David Anderson found an interesting nugget buried in the text:
“(b) Revenue from the District shared responsibility payments collected pursuant to § 47- 2965 shall be deposited into the Fund.
“(c) Money in the Fund shall be used to:
“(1) Engage in outreach to uninsured District residents to increase health insurance coverage;
“(2) Provide information to District residents on options for health insurance coverage; and
“(3) Engage in activities that increase the availability of health insurance options or increase the affordability of insurance premiums in the individual health insurance market, for District residents.
“(d)(1) The money deposited into the Fund shall not revert to the unrestricted fund balance of the General Fund of the District of Columbia at the end of a fiscal year, or at any other time.
“(2) Subject to authorization in an approved budget and financial plan, any funds appropriated in the Fund shall be continually available without regard to fiscal year limitation.
Anderson's read of this, which sounds accurate to me, is that this would also authorize the DC Council and/or DC ACA exchange to use the funds for either additional direct subsidies (hopefully targeted towards those earning more than 400% FPL!) or a reinsurance program, like New Jersey intends to do. Between the two, my guess is that they'd go with direct subsidies, which I'd imagine would be easier to put in place since I don't think they require a federal waiver approval, as opposed to reinsurance which does.