Individual Health Care Mandate vs. Missouri’s Prop C

Missouri’s Prop C seeks to exempt Missouri from the individual health care mandate outlined in The Patient Protection Act, which was signed into law in March. Last month during the primary elections, voters in Missouri voted overwhelming in favor of Prop C. What does that mean for Missourians?

At this time, we wait and see.

However, before delving into whether Prop C or the federal mandate takes precedent, it is beneficial to summarize what the federal health care mandate entails:

  • The federal mandate requires every individual to maintain essential health care coverage beginning January 1, 2014. This essentially means we have about three years before the new law kicks in.
  • People with religious reasons, any individual who is not a U.S. Citizen or national, or an alien lawfully present in the U.S., and any incarcerated individual, other than one pending on disposition of charges, are exempt from the penalty.

Penalties will be assessed monthly as amount equal to 1/12 of the greater of:

  • 1. Flat dollar amount – the lesser of the sum of applicable dollar amounts. In 2014, the amount is $95; 2015 – $325, and 2016 – $695. In 2017 and years thereafter, the amount will be $695, times the cost of living adjustment or 300% of the applicable dollar amount for the calendar year.
  • 2. Percentage of Income – percentage of taxpayers gross income for the taxable year. In 2014, the percentage is 1%; 2015 – 2%, and in 2016 and years thereafter, it is 2.5%.

There are many opinions as to what law takes precedent in this situation. Courts have generally ruled in favor of the federal government when state laws conflict with federal laws. If Prop C takes precedent, the above would be null and void; if federal law takes precedent, the above is effective January 1, 2014.

Whatever side wins the health care mandate in Missouri, it is important for Missourians to know what the law entails.

Anders CPAs are equipped with up-to-date information on the health care reform to ensure our clients and colleagues are informed.

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