Requires residents to maintain minimum essential coverage health insurance in the state of New York or pay a tax for failing to do so; provides that such funds be used for the NY State of Health marketplace.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2681 Revised 04/29/25
SPONSOR: Bores TITLE OF BILL:
An act to amend the tax law, in relation to requiring persons maintain
minimum essential coverage
PURPOSE OR GENERAL IDEA OF BILL:
To incentivize those who would otherwise not purchase health insurance
to enter the health insurance market by applying a tax for not obtaining
insurance
SUMMARY OF PROVISIONS:
Section one: Provides a short title
Section two: Creates a new article 33-c to.the State Tax Law that
applies a new tax to those who do not obtain health insurance coverage
in a given year.
Section three: Establishes the effective date.
JUSTIFICATION:
This legislation establishes a new tax designed to ensure that all indi-
viduals maintain adequate health insurance coverage, as required under
federal law. The proposed tax aligns state policy with the intent of the
now-repealed individual mandate of the Affordable Care Act (ACA) to
purchase health insurance by imposing a penalty on individuals who fail
to secure minimum essential coverage. This bill is intended to encourage
health insurance coverage enrollment which will reduce the number of
uninsured individuals which promotes public health, prevents costs asso-
ciated with uncompensated care, and lowers health insurance costs by
expanding the market to include healthy people who otherwise would not
purchase coverage.
This legislation includes several exceptions to avoid burdening New
Yorkers who are under financial distress or for whom applying the tax
would be unfair. Individuals with incomes below the state filing thresh-
old, residents of other states, or those qualifying for religious or
hardship exemptions will be exempt from the penalty. The bill provides a
mechanism for the state to collect penalties through tax refunds, with
the revenue directed to the NY State of Health Fund, which supports the
state's health insurance exchange. By maintaining the requirement for
minimum essential coverage, this bill reinforces the state's commitment
to expanding access to healthcare and reducing the financial burden of
uninsured individuals on the broader healthcare system.
Five other states and Washington, D.C., have implemented the Individual
Mandate in some form or another. When California instituted a similar
policy, state officials estimated the revenue for the state at around
1.3 billion dollars for the first three years of the program. This bill
would prove to be a substantial surplus for the state, as well as a
strong incentive to get more people health insurance.
PRIOR LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
To be determined.
EFFECTIVE DATE:
This act shall take effect January 1, 2025. Effective immediately, the
addition, amendment and/or repeal of any rule or regulation necessary
for the implementation of this act on its effective date are authorized
to be made and completed on or before such date.
