If you are confused as where you stand as an individual or employer when it comes to the Affordable Care Act (ACA) you have plenty of company. In an effort to ease some of your anxiety or perhaps clarify some issues, please read on.


  • The individual mandate of the ACA requires all individuals to obtain the minimum essential coverage through an employer-sponsored plan or through an individual plan purchased through a marketplace (exchange) or privately before the end of the initial enrollment period (March 31, 2014). However, late in November, the Center for Consumer Information and Insurance Oversight issued a letter to State Insurance Commissioners allowing the renewal of certain non-grandfathered coverage plans to continue coverage which otherwise would have been terminated or cancelled due to these plans not providing the minimum essential coverage required by the ACA.  However, each state’s insurance commission must still approve this extension. South Dakota has  approved this policy.

The ACA open enrollment period ending March 31, 2014 should not be confused with the open enrollment period for Medicare enrollees. Individuals covered under Medicare are exempt from the individual mandate of the ACA.

  • Penalties for individuals not having ACA required health insurance will be calculated on the 2014 personal income tax returns based on the greater of the stated penalty of $95 per person or 1% of the excess of the taxpayer’s household income  over the his (her) applicable filing threshold. This penalty will continue to increase in subsequent years.
  • Credits/assistance for individuals who cannot afford the cost of their health insurance may be available either as a direct subsidy or as a credit on their personal income tax return.


  • The applicability of the “pay or play” penalty for large employers and the associated reporting requirements has been extended to an effective date of January 1, 2015.
  • As a large employer, you should be determining your measurement period and performing your monthly full-time equivalent calculations for subsequent use.
  • The Small Business Health Options Program (SHOP) which offers a marketplace for small businesses to look for affordable care options was delayed until November 2014.
  • All other aspects of the ACA, such as employee notifications, new hire policies and determination of full-time equivalents are part of the currently operational law.

 2014 will be a challenging year for both individuals and employers. To reduce your anxiety as to the Affordable Care Act or other tax or financial related questions, please contact Ketel Thorstenson for the most up-to-date information on these and other important issues.