What do I need to know about the individual health insurance mandate?



According to ObamaCare’s individual mandate, Americans should get health insurance by 2014 or end up getting a tax penalty. This mandate falls into effect on January 1st 2014, wherein the penalty is applied to your annual taxable income for each month that passes without health insurance. However as you have a 3 month grace period, the marketplaces are open till March 31st 2014.

Adults have to pay $95 and children $47.50 individually as fee, or 1% of their taxable income, whichever is greater, for not having insurance. This mandate to have insurance in 2014 is often referred to as the ObamaCare tax penalty, individual shared responsibility fee or individual mandate.

ObamaCare’s individual mandate

The individual mandate is an important part of ObamaCare. It was first purposed by the Heritage Foundation in 1989 wherein all eligible Americans need to have at least basic health coverage. This individual mandate is part of the shared responsibility provision and is referred to as individual shared responsibility fee.

3 Month coverage exemption gap

Here, if you don’t have insurance by January 31st 2014 or opt to get an exemption, you are charged a fee every month you don’t receive insurance on your year-end taxable income.

Though you have to get your insurance by January 1st, 2014, you technically have a 3 month coverage exemption gap that gives you a maximum of 3 months without coverage in 2014 where you don’t have to pay fees for not having insurance. Including your grace period, you can sign for coverage that starts from as late as April 1st 2014.

The individual mandate

Some important points to know about ObamaCare’s individual mandate are:

1. You should get your policy by January 2014 to avoid paying a fee.

2. This fee is based on an exemption or the number of months a person lives without ‘minimal essential coverage’ in a year.

3. While silver plans on the health insurance marketplace cost you more than 8% of your family income, you are exempt from the mandate after subsidies.

4. You are presented with a coverage gap of 3 months in a year wherein you don’t have to pay the fee for these months.

5. Minimal essential coverage includes most employer based coverage like CHIP, Medicaid and Medicare that is purchased through the state’s marketplace.

6. By paying the tax, you help subsidize the cost of health insurance that is bought through the health insurance marketplace.
7. This insurance mandate is basically a tax, as declared by the Supreme Court on June 20, 2012.

8. ObamaCare offers for affordable insurance where Americans making less than 400% of the federal property level can get low-cost or free health insurance from their state’s health insurance marketplace.

9. As the individual mandate is part of the Shared Responsibility Provision, a key provision of the Affordable Care Act, it is technically called an ‘Individual Shared Responsibility Fee’.




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