H.R. 4118: Suspending the Individual Mandate Penalty Law Equals (SIMPLE) Fairness Act

H.R. 4118

Suspending the Individual Mandate Penalty Law Equals (SIMPLE) Fairness Act

Date
March 5, 2014 (113th Congress, 2nd Session)

Staff Contact
Policy

Floor Situation

On Wednesday, March 5, 2014, the House will consider H.R. 4118, the Suspending the Individual Mandate Penalty Law Equals Fairness Act, under a rule.  H.R. 4118 was introduced on February 28, 2014 by Representative Lynn Jenkins (R-KS). 

Bill Summary

H.R. 4118 delays for one year the requirement that individuals pay a tax for not maintaining “minimum essential coverage” as defined by Section 1501(b) of the Affordable Care Act.  

Background

Under Section 1501(b), Americans are required to maintain minimum essential coverage as determined on a monthly basis.  Failure to maintain coverage results in a “penalty with respect to such failure in an amount determined under subsection (c).”[1] Generally speaking the amount of the tax penalty imposed is the lesser of either the sum of calculated monthly penalty amounts for the taxable year in which the failure occurred; or an amount equal to the national average premium for qualified health plans which have a bronze level of coverage, provide coverage for the applicable family size involved and are offered through exchanges for the plan years in a taxable year.[2] The individual mandate and tax penalty are the underpinnings of the President’s healthcare plan.

However, since the Administration’s flawed roll out of Obamacare, tens of millions of Americans have experienced problems with the President’s health care plan. Whether an inability to log on to the Healthcare.gov website to enroll, or the President’s broken promise that individuals can keep their healthcare plan or their doctor, or the higher premiums and deductibles that middle class Americans are experiencing, Americans are now experiencing first hand a healthcare system that is not about them but about the federal government.

Recognizing that the healthcare rollout was going to be a disaster, the Administration waived the employer mandate tax penalty on July 2, 2013 and again on February 10, 2014.[3] Moreover, on December 20, 2013, the Administration announced that it was extending the hardship exemption to include those individuals who had their health plans cancelled – also allowing them purchase catastrophic coverage.[4] However, the Administration has yet to announce a full delay in the individual mandate or the tax penalty. There are rumors that it could come at the end of the month at the end of open enrollment (March 31, 2014).

It is also worth noting that according to the Ways and Means Committee, as of the end of February, enrollment numbers are 1.7 million short of the Administration’s own prediction. And, if one includes the fact that one in five individuals has not paid their monthly premium that number quickly jumps to almost 2.5 million Americans.[5] 



[1] See 1501(b) amends Subtitle D of the Internal Revenue Code to add a new chapter 48.

[2] See id.

[3] See July 2, 2013 – The Obama Administration submits a proposed rule to delay the implementation of the employer mandate for businesses with over 50 full-time employees or full-time equivalents until January 1, 2015.  The Administration also delayed the employer and insurer information reporting requirements for 2014.  See also, February 10, 2014 – The Administration delays the requirement for businesses with fewer than 100 employees to offer health insurance until 2016.

[5] See This Week in Obamare – Simple Fairness. 

Cost

CBO estimates “that enacting H.R. 4118 would reduce federal deficits by roughly $10 billion over the 2014-2019 period and by roughly $9 billion over the 2014-2024 period.”

Additional Information

For questions or further information contact the GOP Conference at 5-5107.