The US Government has announced it is delaying its employer mandate penalty until 2015 and as such has muddied the waters of insurance for US crew.

In these updates, employers with 50 or more employees are encouraged to provide coverage for full-time employees as of 1 January, 2014. However, the Internal Revenue Service (IRS) will not enforce penalties until exactly a year later, starting 1 January, 2015. This delay, the Government has announced, will allow the Government more time to finalise employer reporting requirements.

However, the Affordable Care Act (ACA) is an individual mandate, so individuals without employer-provided insurance, as described above, will still need to purchase health insurance by 1 January, 2014 or face financial penalties. But, once more, the new healthcare exchanges will not verify consumers’ income and health insurance status until 2015 due to these recently announced delays.

The Crew Report spoke with MHG Insurance Brokers about the impact this will have on crew, who shared the view that crewmembers are likely to be left confused as to whether the Government will feasibly be able to undertake these rigorous checks.

“Is the Government in a position to actually mini audit left, right and centre? No. It’s not reasonable to assume that would happen." - Mark Abba

“It’s just a cautionary tale,” concluded Abba. “Is the Government in a position to actually mini audit left, right and centre? No. It’s not reasonable to assume that would happen. One way they can check it is by doing an audit on a US citizen’s (or alien resident’s) tax return. If that individual decides he doesn’t want to pay then he might just decide to pay the ninety-five dollar fine, but the cautionary tale on the side of that is that it’s exponential each year, so if they do an audit and find you haven’t been paying, you’re going to owe a lot of money,” explained Mark Abba, general manager of MHG Insurance Brokers’ Employee Benefits Division.

“But I stress that this is for every American who pays taxes, because you can have Americans on board yachts who spend nearly three-hundred days all year out of the country and have never paid taxes, so they can actually get away without saying they have got insurance, as they are already compliant,” added Abba.

“From an American citizen’s point of view, everything points towards it being an individual mandate. Every American or resident alien who pays taxes has an individual responsibility or obligation to state they have insurance,” Abba concluded.

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