Commonwealth of Massachusetts Executive Office of Health and Human Services Office of Medicaid www.mass.gov/masshealth Eligibility Operations Memo 12-08 December 1, 2012 TO: MassHealth Eligibility Operations Staff FROM: Amy Andrade, Director, Member and Provider Services RE: MassHealth and the Health Care Reform Individual Mandate Requirement for 2012 Introduction In accordance with the Health Care Reform Individual Mandate Requirement section of the health-care reform policy, Massachusetts law requires all adult residents who are 18 years or older to have health insurance if they can afford it. Failure to do so may result in penalties. The Massachusetts Department of Revenue (DOR) is responsible for enforcing this requirement through the personal income tax filing system. This memo explains how the 2012 Massachusetts tax filing requirements will affect MassHealth members and the responsibilities of the MassHealth Enrollment Centers (MECs) in relation to the requirement. Requirements for Tax Year 2012 As in previous years, taxpayers must demonstrate that they had health insurance for each month in 2012 if it is affordable for them. As established in 2009, the taxpayer’s health insurance must meet the required minimum creditable coverage (MCC) as set by the Commonwealth Health Insurance Connector Authority (Health Connector). This requirement is not set by DOR. There is no penalty for taxpayers with income that is at or below 150% of the federal policy level (FPL). Taxpayers are required to complete Schedule HC (for health care) when filing their personal Massachusetts income taxes. To assist taxpayers in completing this schedule, MassHealth, as an insurance carrier, will issue a Form MA 1099-HC to required members. This form identifies the months that the member had MassHealth coverage. By law, MassHealth must issue these forms no later than January 31, 2013. (continued on next page) Eligibility Operations Memo 12-08 December 1, 2012 Page 2 Minimum Creditable Coverage Minimum creditable coverage (MCC) is the minimum level of benefits needed for taxpayers to be considered insured and avoid tax penalties in Massachusetts. On the Form MA 1099-HC, MassHealth states that MassHealth coverage meets the MCC requirements. Recipients of the 2012 MassHealth Form MA 1099-HC MassHealth will issue the Form MA 1099-HC to members who - had income greater than 150% FPL at any point during the calendar year 2012; - had MassHealth eligibility during the calendar year 2012; and - are at least 18 years old as of December 31, 2012. MassHealth will not issue a Form MA 1099-HC to individuals - with income at or below 150% FPL for the time the member had MassHealth coverage (there is no penalty for those with income at or below 150% FPL). This time can be either - the entire 2012 calendar year; or - only the months the member was covered by MassHealth (partial year); or - in one of the following excluded categories (they are not considered to be insured by MassHealth for the purposes of the Individual Mandate): - Basic Buy-in (category 70); - detox program (category 63); - Essential Buy-in (category AN); - Family Assistance Premium Assistance (categories 72, 73, 74, 75, 77, 78, 96, and 97); - Health Safety Net (primary, secondary, and partial) (categories AP and AQ) (HSN is not MCC compliant); - limited pharmacy (category 56); - mental-health benefit only (category 35); - pharmacy (category 36); - Qualifying Individuals (QI) (categories TC, TD, UH, UR, VF, VG, VH, VJ, 88, and 89) - Qualified Medicare Beneficiaries (QMBs) or Specified Low Income Medicare Beneficiaries (SLMBs) (categories UQ, UV, VC, VD, VE, VK, VL, 19, 22, 23, 24, 25, and 76); - eligible for Essential (category AM) or Basic (category 61), but who have not yet enrolled in managed care; or - eligible for Commonwealth Care or Commonwealth Care Bridge (the Health Connector issues the Form MA 1099-HC for these individuals). (continued on next page) Eligibility Operations Memo 12-08 December 1, 2012 Page 3 Partial Month of Coverage Following the rules from DOR, MassHealth, as an insurance carrier, makes the determination whether a partial month of coverage is treated as a full month of coverage or as a month without coverage. MassHealth addresses a partial month of coverage in the following manner. - Coverage of 15 days or more in one calendar month is treated as a full month of coverage. - Coverage of 14 days or fewer in one calendar month is treated as a month without coverage. Permissible Lapse Periods As in previous years, there is no penalty for those with a lapse in coverage of three or fewer consecutive months during 2012. Taxpayers who lose but then resume their coverage within three or fewer consecutive calendar months will not be subject to penalties. Multiple and distinct lapses are permitted throughout the year. Taxpayers with four or more consecutive months without insurance will indicate on the Schedule HC if they had access to affordable health insurance (either through an employer, the government, or on their own). Examples - An individual had a lapse from January to March (three months), regained insurance in April, and had coverage through October. The health insurance lapsed again for November and December (two months). Both lapse periods are three or fewer months, so there is no penalty. - An individual had health insurance from January through June, but was without coverage from July through December. July, August, and September are within the permitted lapse period and are penalty free. However, there may be a penalty for October, November, and December, if insurance is deemed affordable. Access to Affordable Insurance Taxpayers calculate access to affordable health insurance on the Schedule HC. If insurance is deemed unaffordable, the health-care penalty does not apply. If insurance is deemed affordable, the health-care penalty applies. The taxpayer can appeal the penalty to the Health Connector. More information about the appeals process is available on the DOR website at www.mass.gov/dor. (continued on next page) Eligibility Operations Memo 12-08 December 1, 2012 Page 4 2012 MassHealth Form MA 1099-HC MassHealth is mailing the MassHealth Form MA 1099-HC to covered individuals. It indicates the months the individual was covered by MassHealth and that MassHealth coverage meets the MCC requirements. If all 12 months are marked as being covered by MassHealth, the individual was covered by MassHealth for the entire 2012 calendar year. If specific months are marked, the individual was covered by MassHealth only during the marked months. As previously established in 2010, the 2012 MassHealth Form MA 1099- HC provides information about the DOR online application called “Web File for Income” (WFI), which is available for resident taxpayers. Based on answers to some preliminary questions, individuals may be able to file their Massachusetts income taxes online with DOR for free. The Form MA 1099-HC refers individuals to the DOR website for more information. MEC Responsibilities For inquiries about the Form MA 1099-HC from MassHealth, refer the member to MassHealth Customer Service at 1-866-682-6745 (TTY: 1-800-497-4648 for people who are deaf, hard of hearing, or speech disabled). By law, these forms will be issued no later then January 31, 2013. For inquiries from members who are on MassHealth Essential (category AM) or Basic (category 61) about why they were not credited with having health insurance before they enrolled in managed care, explain that the creditable coverage begins only when the individual is enrolled in a managed care plan. For inquiries about how to calculate access to affordable insurance, refer the member to the Schedule HC instructions in the Massachusetts tax form or on the DOR website. The instructions are available wherever Massachusetts tax forms are available, such as public libraries and online at the DOR website at www.mass.gov/dor. For inquiries about the appeals process, refer the member to the Schedule HC instructions in the Massachusetts tax form. The instructions are available wherever Massachusetts tax forms are available, such as public libraries and online at the DOR website at www.mass.gov/dor. For inquiries about the Health Care Reform Individual Mandate requirement for Commonwealth Care or the Commonwealth Care Bridge members, refer the member to Commonwealth Care Customer Service at (continued on next page) Eligibility Operations Memo 12-08 December 1, 2012 Page 5 MEC Responsibilities (cont.) 1-877-MA-ENROLL (1-877-623-6765) (TTY: 1-877-623-7773 for people who are deaf, hard of hearing, or speech disabled). For inquiries about the DOR online application, Web File for Income (WFI), refer the member to the DOR website at www.mass.gov/dor. Attachment A sample of the MassHealth Form MA 1099-HC (DOR-HC (Rev. 01/13)), in English and Spanish, is attached to this memo. Questions If you have any questions about this memo, please have your MEC designee contact the Policy Hotline. EOM 12-08 December 1, 2012 Attachment Commonwealth of Massachusetts Executive Office of Health and Human Services www.mass.gov/masshealth Date Name Address City, State Zip FORM MA 1099-HC Massachusetts law requires adult residents 18 years and older to have health insurance if they can afford it. By law, the health insurance must meet a certain standard known as “minimum creditable coverage.” Many MassHealth programs meet that standard. Failure to have affordable health insurance (including MassHealth) that meets the minimum creditable coverage requirement may result in penalties. The Massachusetts Department of Revenue (DOR) is responsible for enforcing this requirement through the personal income tax filing process. To show proof of coverage, you must complete Schedule HC (for health care) with your Massachusetts personal income tax return. Our records show that you had MassHealth coverage for the following months: __JAN __FEB __MARCH __APRIL __MAY __JUNE __JULY __AUG __SEPT __OCT __NOV __DEC The MassHealth coverage for the marked months meets the standard for the minimum creditable coverage requirements. You may be asked on the Schedule HC to indicate which months you were covered by health insurance, including MassHealth, by filling in the ovals on the form. Follow the instructions that come with the Schedule HC to determine if you are subject to a penalty. For more information on the individual mandate, including a list of Frequently Asked Questions, or for copies of the Schedule HC, please visit DOR’s web site at www.mass.gov/dor. The Schedule HC can also be found wherever Massachusetts income tax forms are available, such as public libraries. If you have any questions about this notice, please call MassHealth Customer Service at 1-866-682-6745 (TTY: 1-800-497-4648 for people who are deaf, hard of hearing, or speech disabled). Thank you, MassHealth NOTE: DOR has an online application called “Web File for Income” (WFI) available for resident taxpayers. Based on your answers to some opening questions, you may be able to file your Massachusetts income taxes online with DOR for free. Visit DOR’s web site for more information. DOR-HC-1 (Rev. 01/13) Commonwealth of Massachusetts Executive Office of Health and Human Services www.mass.gov/masshealth Fecha Nombre Dirección Ciudad, Estado, Código Postal FORMULARIO MA 1099-HC La ley de Massachusetts exige que los residentes adultos a partir de los 18 años de edad tengan seguro médico si pueden pagarlo. Por ley, el seguro médico debe cumplir con ciertos estándares conocidos como “cobertura acreditable mínima.” Muchos programas de MassHealth cumplen con ese estándar. No tener seguro médico asequible (incluyendo MassHealth) que cumple con el requisito de cobertura acreditable mínima puede resultar en multas. El Departamento de hacienda de Massachusetts (DOR, por sus siglas en inglés) es responsable de hacer cumplir este requisito por medio del proceso de presentación de los impuestos a la renta personales. Para mostrar prueba de cobertura, debe completar el Formulario de impuestos HC [Schedule HC] (para atención médica) con su declaración personal de impuestos a la renta de Massachusetts. Nuestros registros muestran que usted tuvo cobertura de MassHealth en los siguientes meses: __ENE __FEB __MAR __ABR __MAY __JUN __JUL __AGO __SEP __OCT __NOV __DIC La cobertura de MassHealth para los meses marcados cumple con el estándar para los requisitos de cobertura atribuible mínima. Se le podría pedir en el Schedule HC (Formulario de impuestos HC) que indique en qué meses estaba cubierto por seguro médico, incluyendo MassHealth, llenando los óvalos del formulario. Siga las instrucciones que vienen con el Schedule HC para determinar si usted está sujeto a una multa. Para obtener más información sobre este mandato individual, incluyendo una lista de Preguntas más frecuentes, o para obtener copias del Schedule HC, visite nuestro sitio web de DOR en www.mass.gov/dor. El Schedule HC también puede encontrarse en cualquier lugar en donde se disponga de formularios para declaración de impuestos a la renta de Massachusetts, como bibliotecas públicas. Si desea hacer alguna pregunta sobre este aviso, llame al Servicio al el cliente de MassHealth al 1-866-682-6745 (TTY: 1-800-497-4648 para personas sordas, con dificultad auditiva o con dificultad para hablar). Gracias, MassHealth NOTA: el DOR tiene una solicitud en internet llamada “Web File for Income” (WFI)-“Archivo de ingresos por internet” a disposición de residentes que pagan impuestos. Basándonos en sus respuestas a algunas preguntas iniciales, usted podría declarar sus impuestos a la renta de Massachusetts en internet con el DOR de forma gratuita. Visite el sitio web de DOR para obtener más información. DOR-HC-1 (SP) (Rev. 01/13)