We are in the thick of Open Enrollment for the Affordable Care Act, also known as Obamacare. Open Enrollment is the three-month period, that kicked off in mid-November, when consumers can purchase or change their health insurance for the coming year. Most Americans are subject to the Obamacare requirements; meaning they must have health insurance for at least nine months of each calendar year. Those who don’t have coverage for at least nine months, may be subject to a tax penalty which is increasing each year. Read on to learn about eligibility, tax penalties, and coverage exemptions.

Eligibility

The good news is most Americans are eligible for health insurance through the Affordable Care Act. All that’s required is for you to live in the United States and be a U.S. citizen or national. That’s it. Pretty simple, right?

However, you should also find out if you qualify for government subsidies that lower the cost of monthly premiums or those that lower out-of-pocket expenses, which are healthcare costs insurance doesn’t cover.

To be eligible for premium subsidies, your household income must be below 400% of the federal poverty level. That’s about $46,000 for a single person, $62,000 for a couple and $95,000 for a family of four. The lower the income of the individual or family, the higher the subsidy. For subsidies that help with out-of-pocket expenses, an applicant’s household income must be below 250% of the federal poverty level, which is about $29,000 for an individual, $39,000 for a two-person household and $59,000 for a four-person household.

Tax Penalties

In 2015, the required penalty will be 2% of your annual household income or $325 for each adult that isn’t covered ($162.50 per uncovered child under 18). Families without health insurance could be penalized as much as $975. Those penalties will be even steeper in 2016, rising to 2.5% of your annual income or $695 per adult, $347.50 per child and up to $2,085 per family. For those covered part of the year (but less than nine months), the tax penalty will be prorated.

Coverage Exemptions

There are, however, some exceptions to the requirement to purchase health insurance, and those include:

  • living in an area where the lowest-priced health plan is more than 8% of your household income;
  • having an income too low to file a tax return;
  • being a Native American or eligible for services through an Indian Health Services provider;
  • being a member of a recognized heath care sharing ministry or of a recognized religious sect with objections to insurance;
  • being incarcerated–either detained or jailed.

The Obamacare requirements also allow for financial hardship exemptions. For example, if you’re homeless, have experienced an eviction in the previous six months or are filing for bankruptcy you don’t have to pay the penalty fee for not having health insurance.

If you have questions about Obamacare requirements, your eligibility, or need help navigating the health insurance marketplace, look to the professionals at HealthMarkets Insurance Agency. With access to more than 200 different insurance companies, thousands of plans nationwide and the ability to lower your costs through government subsidies, HealthMarkets can help find the right plan for you and your family. Call us 24/7 at (800) 304-3414 or meet with one of our 3,000 local, licensed health insurance agents.

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References

Additional information for the section on exemptions to the mandate found at the Healthcare.gov site that explains fees: https://www.healthcare.gov/fees-exemptions/exemptions-from-the-fee/

Also clarified hardship exemptions here: https://www.healthcare.gov/fees-exemptions/hardship-exemptions/

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