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When does it become mandatory to have health insurance?

A brief overview...
  • As of 2014 with the passing of the Affordable Care Act, it is mandatory for almost all Americans to have health insurance
  • There are exemptions to this individual mandate for low-income individuals, Native Americans, and those who are currently living outside of the United States
  • Most employer-based health insurance plans comply with the individual mandate’s minimum essential coverage requirements as do most government programs such as Medicare and Medicaid
  • If you do not have health insurance now that the individual mandate is in effect, you may be subject to a penalty
  • There are additional exemptions to the fee for those who are temporarily uninsured or for other extenuating circumstances

When did it become mandatory to have health insurance?

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Beginning in 2014, it became a requirement for almost all Americans to have minimum essential health insurance coverage or they could face a fine when they file their federal tax returns.

Some people are exempt from having to pay this fee such as low-income individuals, Native American people, or those who are not currently living in the United States.

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Am I in compliance with the individual mandate?

If you already have health insurance, there is a good chance that it satisfies the minimum essential coverage requirement. Most employer-based insurance plans meet the requirements, as does Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), and any coverage for active duty military members or retired members. If your insurance is not in compliance with the individual mandate or if you do not have health insurance at all, it is possible to purchase it online via the Healthcare Marketplace.

What happens if I don’t get health insurance?


If you choose not to get health insurance even though you do not fall into one of the exempt groups and you can afford, you may be responsible for paying the individual mandate penalty fine. You will owe this fee for any month that you and your dependents did not have health insurance. It is calculated in one of two ways and you will pay whichever one winds up being higher.

For the 2016 year, you will be responsible for paying either 2.5 percent of your household income or $695 per adult and $347.50 per child under 18 in the household that does not have health insurance coverage. There are maximum amounts associated with this penalty fine.

If you are paying as a percentage of your household income, the maximum will be roughly equivalent to the average cost of a Bronze healthcare plan available for purchase in the marketplace. If you are paying per person, the maximum amount will be $2,085.

You will pay the fee when you file your federal tax return for the previous year. If you had health insurance coverage for a portion of the year, you will only be responsible for paying 1/12th of the annual amount you owe for each month that you went without coverage.

What exemptions are available that I may qualify for?

There are a few additional exemptions that you may qualify for, especially lower income individuals. If the minimum amount you would have had to pay for your health insurance premiums was more than 8 percent of your household income, then insurance will be considered unaffordable and you will be exempt from paying the penalty fine.

If your income is below the minimum threshold for filing a tax return, you also will not be responsible for paying the fine.

If you only went without coverage for a short period of time during the year, you may qualify for a short coverage gap exemption. You are only eligible for this exemption if you went without insurance for less than three full consecutive months. You can only claim this exemption once in any given year.

Is my employer required to provide me with health insurance?

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The Obamacare employer mandate was supposed to start in 2014 but was delayed until the following year. Employers with 100 or more full-time equivalent employees are required by law to provide health insurance for a minimum of 95 percent of their full-time employees and their dependents until the age of 26 in 2016.

In 2015, it was only mandatory for employers to provide insurance for at least 70 percent of their full-time employees. If employers do not comply with this mandate, they will be responsible for paying a fee. Smaller businesses that only have between 50 and 99 full time equivalent employees were required to start offering health insurance in 2016. This mandate does not effect businesses with fewer than 50 employees and part-time workers.

How do I get health insurance if I do not already have it?


You can sign up for coverage on the health insurance marketplace website during the open enrollment period between November 1, 2016 and January 31, 2017.

Depending on your circumstances, such as leaving a job or a change in residence, you may be eligible for a special enrollment period. If you do not have health insurance, you can reasonably afford it, and you do not sign up during an enrollment period, you will be responsible for paying the penalty fine.

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