Orlando Harmon
Massachusetts has an individual mandate law that requires adult residents to carry health insurance coverage that meets Minimum Creditable Coverage (MCC) standards. This is to ensure access to affordable health care services, including preventive health care, and to avoid tax penalties. To know if your insurance has MCC, look for a notice on the front of your plan documents. If you receive a Form MA 1099-HC from your insurer, it will indicate whether your insurance meets the MCC requirements. If you are unsure, you can call your insurer or your employer's human resources department for help.
| Characteristics | Values |
|---|---|
| What is MCC? | Minimum Creditable Coverage |
| Who does it apply to? | Adult residents of Massachusetts |
| What does it require? | Health insurance coverage that meets MCC standards |
| What are MCC standards? | The minimum level of health coverage that residents must have to avoid tax penalties under the state's individual mandate law |
| What are the MCC standards set by? | The Massachusetts Health Connector (a state agency) |
| What benefits does an MCC-compliant plan include? | Medical/surgical care, including preventive and primary care, maternity and newborn care, including pre-and-postnatal care |
| How do I know if my insurance has MCC? | Massachusetts-licensed health insurance companies must put an MCC-compliance notice on their plans to indicate if it does or doesn't meet MCC. If you receive a Form MA 1099-HC from your insurer, it will indicate whether your insurance meets MCC requirements. |
| What if my insurance doesn't have MCC? | You may be subject to state income tax penalties. However, there is a grace period of 3 consecutive months allowed for lapses in coverage. |
| Are there any exemptions? | Yes, you can get an exemption if MCC is not affordable for you. Exemptions are determined through your state income tax filings. |
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MCC-compliance notice
In the state of Massachusetts, most adult residents are required by law to have health insurance coverage that meets the "Minimum Creditable Coverage" (MCC) standards. This is to ensure that they have access to a broad range of affordable health care services, including preventive health care, and to avoid tax penalties under the state's individual mandate law.
To know if your insurance has MCC, you should look for an MCC-compliance notice on your plan documents. Massachusetts-licensed health insurance companies are required to put this notice on their plans to indicate if they meet the MCC requirements or not. If you receive a Form MA 1099-HC from your insurer, it will also indicate whether your insurance meets the MCC requirements. This form is submitted by insurance carriers and helps to determine how long you have had coverage.
If you do not have an MCC-compliant plan, you may be subject to a penalty, which is calculated for each month that you were not enrolled in an MCC-compliant plan. These penalties vary depending on your income, age, and family size. However, there is a grace period that allows lapses in coverage of 3 or fewer consecutive months, and you won't be penalized if it is determined that you didn't have access to affordable insurance that met MCC standards.
If you are unsure about your plan's MCC compliance, you can call your insurer or your employer's human resources department or benefits administrator for assistance. You can also refer to the list of benefits outlined by the Massachusetts Health Connector to see if your policy meets the MCC requirements. Additionally, you can use the Affordability Tool provided by the Massachusetts Health Connector to predict your penalty risk if you do not have MCC.
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Form MA 1099-HC
Massachusetts has an "individual health insurance mandate" that requires most adults to carry health insurance if it is affordable to them and that meets certain coverage standards, referred to as "Minimum Creditable Coverage" (MCC). The Massachusetts Health Connector sets the coverage and affordability standards, and the Massachusetts Department of Revenue (DOR) monitors and enforces the requirement via the state tax filing process.
Massachusetts law requires adult residents to carry health insurance coverage that meets MCC standards to provide access to a broad range of affordable health care services, including preventive health care. MCC is the minimum level of health coverage that Massachusetts residents must have to avoid tax penalties under the state's individual mandate law. MCC standards help ensure that covered individuals do not suffer a major financial burden if they suffer from a serious injury or illness.
The Form MA 1099-HC is a Massachusetts tax form that reports information about the health coverage of Massachusetts residents. Employers providing MCC to Massachusetts residents must distribute Form MA 1099-HC to their employees and submit it electronically to the Department of Revenue (DOR) by January 31, after the end of the medical plan year. The form is only required to be sent to the primary enrollee/subscriber and not to any dependents.
The employer needs the following information to file Form MA 1099-HC:
- The name and Federal Tax ID (FID) of the insurance company or administrator who is responsible for the coverage
- The primary subscriber's details, such as name, subscriber number, date of birth, and address
- The period of time when the subscriber and their dependents had minimum creditable coverage. If the employee had coverage for the whole year (all 12 months), check the box that indicates the same. If the employee did not have coverage for all 12 months of the year, the box against the months the minimum creditable coverage was offered must be checked.
If your plan does not meet the MCC requirements for the entire time that the mandate applied to you, fill in the "No MCC/None" oval in line 3 of the Schedule HC. You won't be penalized if it is determined that you didn't have access to affordable insurance that met MCC standards. Most plans meet the MCC standards, and Massachusetts-licensed health insurance companies must put an MCC-compliance notice on their plans to indicate if it does or doesn't meet MCC. If you receive a Form MA 1099-HC from your insurer, it will indicate whether your insurance meets MCC requirements.
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Affordability
In Massachusetts, most adult residents are required by law to have health insurance coverage that meets the "Minimum Creditable Coverage" (MCC) standards. The MCC standards are designed to provide access to a broad range of affordable health care services, including preventive health care. This mandate is in addition to the federal mandates under the Affordable Care Act (ACA).
The Massachusetts Health Connector sets the coverage and affordability standards, and the Massachusetts Department of Revenue (DOR) monitors and enforces the requirement via the state tax filing process. The Health Connector has an Affordability Schedule to help you see if you might be exempt from the penalties. Exemptions are determined through your state income tax filings. The tax forms also provide an option to appeal any penalties. If you refuse health insurance due to a sincerely held religious belief, you may also claim an exemption on your state tax forms. The Health Connector also offers Certificates of Exemption if you face special circumstances or hardships.
The individual mandate penalty applies only to adults who can afford health insurance. The penalties vary depending upon your income, age, and family size, and are calculated for each month that you were not enrolled in an MCC-compliant plan. You should consult with your tax advisor or accountant for additional assistance in determining how you may be impacted.
Massachusetts-licensed health insurance companies must put an MCC-compliance notice on their plans to indicate if they meet the MCC requirements. If you receive a Form MA 1099-HC from your insurer, it will indicate whether your insurance meets the MCC requirements. If you did not receive one from your insurer and get health coverage through your job, you can call your insurer or your employer's human resources department or benefits administrator for help.
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Tax penalties
In Massachusetts, most residents over 18 who can afford health insurance are required by law to have coverage for the entire year or pay a penalty through their tax returns. This is known as the individual mandate. The penalty is calculated for each month that an individual is not enrolled in a Minimum Creditable Coverage (MCC) compliant plan. The MCC refers to the minimum level of benefits that adult taxpayers need to carry to be considered insured and avoid tax penalties.
Massachusetts taxpayers who do not maintain MCC for themselves and their dependents throughout the year and do not qualify for an exception are subject to state income tax penalties. The Health Connector sets an "Affordability Schedule" each year, which shows the maximum monthly premium that an individual could afford to pay for insurance. The “affordable” premium varies according to the individual's income bracket. If an individual could have purchased coverage that meets MCC standards for a monthly premium that is equal to or less than the amount they are able to afford, they may be subject to a penalty.
There is a grace period for people who have a gap in coverage. You can go up to 3 consecutive months without coverage and multiple lapses are allowed within 1 calendar year. Therefore, if you lose your coverage but then resume coverage within 3 or fewer calendar months, you won't be penalized.
To avoid tax penalties, individuals must be enrolled in health insurance plans that meet the MCC requirements. To determine whether your insurance meets the MCC requirements, look for an MCC-compliance notice on your plan documents. If you receive a Form MA 1099-HC from your insurer, it will indicate whether your insurance meets the MCC requirements. If you did not receive this form and get health coverage through your job, you can call your insurer or your employer's human resources department for help.
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MCC requirements
Massachusetts has an "individual health insurance mandate" that requires most adults to have health insurance coverage if it is affordable to them. This coverage must meet certain standards, referred to as "Minimum Creditable Coverage" (MCC). The MCC standards are set by the Massachusetts Health Connector, a state agency, and they apply to all members covered by the plan. These benefits include a broad range of services, such as medical/surgical care (including preventive and primary care), and maternity and newborn care (including pre-and-postnatal care). Massachusetts-licensed health insurance companies must put an MCC-compliance notice on their plans to indicate if it meets the MCC standards. If you receive a Form MA 1099-HC from your insurer, it will also indicate whether your insurance meets the MCC requirements.
If your plan does not meet the MCC requirements, you may fill in the "No MCC/None" oval in line 3 of the Schedule HC. You will not be penalized if it is determined that you did not have access to affordable insurance that met MCC standards. Most plans do meet the MCC standards, but if you are unsure, you can call your insurer or your employer's human resources department for help.
There is a grace period for people who have a gap in coverage. You can go up to 3 consecutive months without coverage without penalty, and multiple lapses are allowed within 1 calendar year. Exemptions are also available for those who cannot afford Minimum Creditable Coverage or who refuse health insurance due to sincerely held religious beliefs.
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Frequently asked questions
Massachusetts-licensed health insurance companies must put an MCC-compliance notice on their plans to indicate if it does or doesn't meet MCC. If you receive a Form MA 1099-HC from your insurer, it will indicate whether your insurance meets MCC requirements. If you didn't receive one from your insurer and get health coverage through your job, you can call your insurer or your employer's human resources department or benefits administrator for help.
If your plan doesn't meet the MCC requirements for the entire time that the mandate applied to you, fill in the "No MCC/None" oval in line 3 of the Schedule HC. You won't be penalized if it is determined that you didn't have access to affordable insurance that met MCC. Exemptions are determined through your state income tax filings. The tax forms also provide an option to appeal any penalties.
Minimum Essential Coverage (MEC) is health coverage that meets certain standards defined by the Affordable Care Act (ACA). Most group health plans, such as coverage provided by employers, as well as Medicare, and most Medicaid are considered MEC and satisfy the ACA's individual responsibility requirement. In almost all cases, plans that meet the state’s MCC requirements also meet the federal MEC requirements.
