Administration Grants Itself 3-Month Exemption from Individual Mandate

Terence P. Jeffrey
By Terence P. Jeffrey | October 24, 2013 | 10:11 AM EDT

Health and Human Services Secretary Kathleen Sebelius and President Barack Obama (AP Photo)

The Obama administration is granting itself a three-month exemption from the Obamacare mandate that requires individuals to buy health insurance—even though the exemption, as written into the law itself, was plainly intended to provide forbearance to individual citizens who failed to meet the mandate, not to an incompetent administration that has failed to effectively implement the law.

In July, the administration similarly unilaterally suspended for one year the Obamacare mandate that requires large employers to provide insurance to their workers.

In neither case did President Obama seek congressional action to change the terms of the law--even though Article 1 Section 3 of the Constitution says the president "shall take care that the laws be faithfully executed."

“The Obama administration said Wednesday night that it will give Americans who buy health insurance through the new online marketplaces an extra six weeks to obtain coverage before they incur a penalty,” the Washington Post reported on Thursday.

“The announcement means that those who buy coverage through the exchange will have until March 31 to sign up for a plan, according to an official with the Department of Health and Human Services,” said the Post.

“The law also says that people will be fined only if they do not have coverage for three months in a row,” says the Post.

However, the Patient Protection and Affordable Care Act expressly mandates that individuals “shall” have government-approved health care coverage by January 2014, or else pay a fine. It then extends an exemption to the individual mandate to certain classes of people and also provides exemptions from the Obamacare penalty to individuals under certain circumstances—including those who have a continuous coverage gap of three months or less in any year after the mandate kicks in in January 2014.

The law does not give a three-month exemption to the government.

One problem that could be caused to individuals by the Obama administration saying that the 3-month exemption will be applied to the first three months of 2014--if people cannot sign up because of government incompetence--will be that, under the terms of the law, an individual can only claim the 3-month exemption once in the year. If they truly need it for personal reasons later in 2014, they would not be able to take it.

Last month, the Obama administration rejected legislation approved by the Republican-controlled House and included in a continuing resolution to fund the government that would have authorized the administration to delay implementation of Obamacare for one year. That House-passed delay was not approved by the Democrat-majority Senate and was opposed by President Obama.

Section 5000A of the Patient Protection and Affordable Care Act is entitled “Requirement to Maintain Minimum Essential Coverage.”

It says: “An applicable individual shall for each month beginning after 2013 ensure that the individual, and any dependent of the individual who is an applicable individual, is covered under minimum essential coverage for such month.”

“If an applicable individual fails to meet the requirement of subsection (a) for 1 or more months during any calendar year beginning after 2013, then, except as provided in subsection (d), there is hereby imposed a penalty with respect to the individual in the amount determined under subsection (c).”

Who is exempted from buying insurance or from paying a penalty if  they fail “for one or more months” to do so?

Subsection ( d ) lists the types of persons who are not “applicable individuals” and are thus exempted from the penalty for not having insurance.

These included members of certain “recognized religious” sects, people who are members of a “health care sharing ministry,” “individuals not lawfully present in the United States,” and “incarcerated individuals.”

Subsection ( e ) lists individuals who get “exemptions” from the penalty for not buying the mandated insurance.

These include individuals whose insurance premiums would “exceed 8 percent of such individual’s household income,” “taxpayers with income under 100 percent of poverty line,” “members of Indian tribes,” and individuals the HHS secretary determines “to have suffered a hardship with respect to the capability to obtain coverage under a qualified health plan."

This same subsection of the law—between the exemption for members of Indian tribes and the exemption for “hardships--includes language providing individuals with an exemption from the penalty in “[a]ny month the last day of which occurred during a period in which the applicable individual was not covered by minimum essential coverage for a continuous period of less than 3 months.”

But then the law goes on to say that a person can take this exemption for only one 3 month period in a year:

‘‘(B) SPECIAL RULES.—For purposes of applying this paragraph— (i) the length of a continuous period shall be determined without regard to the calendar years in which months in such period occur, (ii) if a continuous period is greater than the period allowed under subparagraph (A), no exception shall be provided under this paragraph for any month in the period, and (iii) if there is more than 1 continuous period described in subparagraph (A) covering months in a calendar year, the exception provided by this paragraph shall only apply to months in the first of such periods.”