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Individual Mandate


The Affordable Care Act (ACA) includes a requirement that all US citizens attain health care coverage (insurance), or pay a tax penalty. This includes both adults and children who are legal US citizens.

 

The law also created new opportunities for people to obtain health insurance, such as new state insurance Exchanges in each state that will help individuals and small groups shop for insurance, tax credits (subsidies) to help defray the costs of purchasing private coverage for low-income individuals, and an expansion of the Medicaid program in many states.

 

 

Fulfilling the Mandate

 

The mandate to obtain health insurance coverage will not change impact individuals in the United States who already have some form of health coverage.

 

For those who have health insurance through their job/employer, or are covered under another program, that coverage fulfills the requirement and the need not change it.

 

The requirement to have health insurance is satisfied (and therefore no tax penalty will be assessed) by any of the following:

 

  • Health Insurance offered by an employer
  • Medicare
  • Medicaid or the Children’s Health Insurance Program (CHIP)
  • TRICARE (for members of the military, service members, retirees, and their families)
  • The veterans’ health program
  • A grandfathered health plan that was in existence before the health reform law was enacted

 

Any combination of these sources of insurance will satisfy the requirement as long the combined coverage extends through the entire calendar year. However, a lapse in coverage could lead to tax penalties.

 

Those without one of these forms of insurance, or without consistent coverage for the entire year, or who are unhappy with the coverage they currently have, will have new options to obtain insurance though the Medicaid Expansion, and state Insurance Exchanges.

 

 

Exemptions

 

Certain groups will be exempted from the requirement to attain health insurance coverage. Among them are:

 

  •  Members of religions opposed to acceptance of benefits from a health insurance policy
  • Undocumented immigrants
  •  Incarcerated individuals
  • Members of Indian tribes
  •  Those with family income level below the threshold for filing a tax return ($10,000 for an individual, $20,000 for a family in 2013)
  • Those who, after taking into account any employer contributions or tax credits, have to pay more than 8% of their income for health insurance

 

 

Current Status

 

The individual mandate took effect on May 1st, of 2014. Individuals who did not have coverage by that date can expect to have a tax penalty assessed against them when they file 2014 taxes.

 

Learn More: Tax Penalties

 

 

Additional Information:

 

 

See the resources below for additional information about the individual mandate.

 

The Requirement to Buy Coverage Under the Affordable Care Act – Kaiser Family Foundation

 

Quantifying Tax Credits for People Now Buying Insurance on Their Own  – Kaiser Family Foundation

 

Change in Pathways to Insurance for Persons with HIV Under the ACA- Kaiser Family Foundation 

 

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