Most U.S. citizens, legal residents and their dependents. Unless exempt, assume that coverage is required.
Starting in 2014, if you don’t have minimum essential coverage, or one of the accepted exemptions listed above, you will have to pay a penalty. The penalty starts out fairly low for 2014, but increases considerably in 2015 and again in 2016. Use our penalty calculator to see the projected penalty for each year.
The annual penalty will be a set amount per individual (including dependents) or a percentage of your taxable income, whichever is greater. The annual penalty is capped at an amount roughly equal to the national average premium for a bronze-level qualified health plan. In other words, the penalty will be no more than it would have cost to buy insurance in the first place.
The penalty is charged for each month you (and your dependents) don’t have minimum essential coverage, and will be figured on your tax return. You can be uninsured for less than three months without penalty.
The penalty is figured on your tax return and is due by the normal tax filing deadline, usually April 15.
You can be uninsured for less than three consecutive months without penalty.
Exemptions are provided for those with low income. Also, being covered by Medicaid counts as being covered. In many states, Medicaid will expand to cover those under age 65 who have an income of up to 133% of the federal poverty level.
Also, people in their 20s may have the option to buy a lower-cost “catastrophic” health plan.
Finally, if your income is less than 400% of the federal poverty level, a premium assistance credit will be available to help you buy insurance.
The Affordable Care Act requires health insurance plans to provide minimum services in 10 categories, called “essential health benefits.” While nearly everyone must obtain minimum essential coverage, each state has some leeway in defining what those benefits are.
Most people who have insurance at work will continue to be insured there. If your share of the premium for the insurance is more than 8% of your income in 2014 or 8.05% of your income in 2015, you’ll be able to shop for insurance in a Health Insurance Marketplace.
Each Marketplace will offer four plan levels. The lowest cost of these would be the bronze plan.
Also available if you’re under 30 will be a “catastrophic” plan. Such plans must still provide minimum essential coverage, but will have a lower premium because of a higher deductible and out-of-pocket costs than the other listed plans.
The purpose of the credit (also known as a subsidy) is to help individuals with moderate income buy health insurance through a Marketplace. You must be enrolled in a health insurance plan through an Exchange to be considered for the credit. Use our insurance cost calculator to see how much the credit can help with purchasing insurance.
No, you can join your spouse’s coverage, buy coverage through a Marketplace, or buy insurance on your own, directly from an insurance company or broker. But if you decline your employer’s coverage and are without coverage for yourself and your dependents, you will be subject to a penalty.
If you aren’t claimed as a dependent on your parents’ tax return, you wouldn't be considered part of the household. So as long as your income is within the guidelines, you may be eligible for the credit even if you have access to your parents' health insurance.