The District of Columbia (D.C.) Individual Taxpayer Health Insurance Responsibility Requirement requires individuals residing in D.C. to maintain acceptable health coverage or pay a penalty. This requirement became effective in 2019.
D.C.’s individual mandate requires most individuals residing in D.C. to maintain minimum essential coverage (MEC) for each month of the year. Individuals who do not obtain acceptable health insurance coverage and do not qualify for an exemption will be penalized.
The D.C. local individual mandate largely mirrors the federal individual mandate requirement under the Affordable Care Act (ACA). The ACA’s individual mandate penalty was reduced to zero as of 2019, effectively eliminating the federal penalty.
- DC Individual Taxpayer Health Insurance Responsibility Requirement – https://code.dccouncil.us/dc/council/code/titles/47/chapters/51/
- D.C. Office of Tax and Revenue – https://otr.cfo.dc.gov/
- Notice 2019-04 OTR Notice 2019-04 provides FAQs on the related reporting requirement.
Minimum Essential Coverage
For purposes of the D.C. individual mandate, MEC has the same definition as under the ACA. MEC includes coverage under:
- A government-sponsored program, such as coverage under the Medicare or Medicaid programs, the Children’s Health Insurance Program (CHIP), TRICARE and certain types of veterans’ health coverage;
- An eligible employer-sponsored plan (including a self-funded plan, COBRA and retiree coverage), defined as any plan offered by an employer to an employee which is a governmental plan or a plan or coverage offered in the small or large group market within a state;
- A health plan purchased in the individual market;
- A grandfathered health plan;
- The D.C. Immigrant Children’s Program;
- A multiple employer welfare arrangement (MEWA), if the MEWA provided coverage in D.C. on Dec. 15, 2017, or complies with federal law applicable to MEWAs that were in place as of Dec. 15, 2017.
MEC does not include coverage that consists solely of excepted benefits, such as stand-alone vision or dental plans, long-term care insurance, supplemental or specified-disease coverage, and accident or disability insurance.
The Penalty Amount
D.C.’s individual mandate penalty is calculated in the same manner as the ACA’s individual mandate. The penalty is the greater of two amounts—the flat dollar amount ($695) or the percentage of income amount (2.5% of income). The D.C. Health Benefit Exchange Authority publishes the individual mandate penalty amounts each year by Sept. 30. For purposes of calculating the penalty, income is the taxpayer’s household income minus any exemption (or exemptions, for a married couple) and standard deductions.
Families will pay half the penalty amount for children, up to a family cap of three times the annual flat dollar amount. Also, the penalty is capped at the average premiums for bronze level health plans available on DC Health Link.
The requirement to maintain MEC applies to individuals of all ages (including children), unless that individual falls within a specific exception or is exempt. An individual is treated as having coverage for a month if he or she has coverage for any one day of that month.
The following categories of individuals are exempt from the D.C. individual mandate penalty:
|Exemptions Claimed on Tax Return||
Exemptions Applied for Through DC Health Link
An individual who is eligible for an exemption for any one day of a month is treated as exempt for the entire month.
To help administer the individual mandate penalty, D.C. imposes a reporting requirement on every entity that provides MEC to an individual during a calendar year, similar to the ACA’s reporting requirement under Internal Revenue Code Section 6055. This reporting requirement applies to:
- Employers or other sponsors of employment-based health plans that covered at least 50 full-time employees, including at least one D.C. resident, during the applicable calendar year;
- Persons or entities that provided MEC to a D.C. resident during the applicable calendar year;
- The D.C. Department of Health Care Finance;
- Insurance carriers licensed or otherwise authorized to offer MEC.
To satisfy this reporting requirement, reporting entities are required to electronically file the federal Forms 1094-C and 1095-C, or 1094-B and 1095-B, as applicable, through www.MyTax.DC.gov, using the D.C. Office of Tax and Revenue’s (OTR’s) prescribed layouts and file formats. For the 2019 tax year, these forms must be filed electronically by June 30, 2020. For tax years beginning after 2019, the deadline is 30 days after the IRS deadline for submitting Forms 1095-B or 1095-C, including any extensions granted by the IRS. OTR published Notice 2019-04 to provide more information on this reporting requirement.
The D.C. individual mandate penalty will generally be assessed and collected in the same manner as D.C. taxes.
This guide is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. It is provided for general informational purposes only. Readers should contact legal counsel for legal advice.
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