The law requires everyone (with few exceptions) to have health coverage or pay a tax penalty each year. Individuals are required to maintain minimum essential coverage for themselves and their dependents. Some may qualify for an exemption, while others may receive financial assistance to help cut the cost of health coverage.
What type of coverage satisfies the individual mandate?
Everyone must have minimum essential coverage, which includes:
• Individual coverage under an employer-sponsored plan;
• Plans in the individual market;
• Grandfathered plans;
• Government programs such as Medicare, Medicaid, CHIP, or TRICARE; and
• Certain other coverage.
Specialized coverage, such as a dental-only policy, is not required to meet the minimum essential coverage requirements.
Who may qualify for an exemption from the mandate?
The law includes a list of exemptions to the individual mandate. You may qualify for an exemption if you meet any of the following criteria:
• You are uninsured for less than three months of the year;
• The cost of purchasing coverage is more than 8% of your household income;
• You belong to a Health Care Sharing Ministry;
• Your income is below the federal income tax filing limit;
• You are a member of an Indian tribe;
• You have a religious exemption;
• You are incarcerated and not awaiting the disposition of charges against you; or
• You do not lawfully reside in the U.S.
To apply or learn more about an exemption, call the Health Insurance Marketplace at 1-800-318-2596; TTY: 1-855-889-4325, or visit their website www.healthcare.gov.
If you do not have a health plan, you will pay a penalty when filing federal income taxes, unless you qualify to receive an exemption. The tax penalties for individuals and families are phased-in as follows:
In 2016, the penalty is $695 per adult ($347.50 per child) with a maximum of $2,085 for a family or 2.5% of taxable income, whichever is greater.
In 2017, the penalty is $695 per adult ($347.50 per child) with a maximum of $2,085 for a family or 2.5% of taxable income, whichever is greater.