By now you’ve probably heard a lot about the Affordable Care Act (ACA), also known as Obamacare. One of the most controversial issues of the ACA is the individual mandate. With all of the political banter being thrown around it can be difficult to get the facts about this change to healthcare laws that affect most Americans. Here are some important things you should know about the individual mandate.
Most Americans should have health insurance by March 31, 2014.
When someone who doesn’t have health insurance gets treatment they can’t afford. The individual mandate requires most Americans (with some exemptions) to have at least “minimum essential coverage” or pay a penalty known as the “individual shared responsibility payment”.
By requiring people to have health insurance, the government hopes that insurance companies will be able to offer new benefits and offer health insurance to everyone, regardless of pre-existing conditions. In addition, the penalties will help to offset the cost that Americans have to pay for the uninsured and will also encourage people to get health coverage.
Here is how the “individual shared responsibility payments” will work
For 2014, penalties are either 1% of your yearly household income, or $95 per adult per year ($47.50 per child under 18), whichever is higher. Over the next few years, penalty fees will continue to increase.
|2015||2% of income or $325 per person|
|2016||2.5% of income or $695 per person|
|2017 and beyond||Adjusted for inflation|
It is important to note that the penalty is calculated for each month that you’re uninsured. The Affordable Care Act allows a coverage gap of 3 months per year without paying a penalty. This is where the March 31deadline comes from. If you have been without coverage for more than 3 months, you are required to pay 1/12 of the penalty for each month that you didn’t have health insurance. The mandate is officially considered a tax and will be applied to your yearly tax return.
To avoid penalties, you need at least “minimum essential coverage”.
If you have insurance through your employer or through the government, you will not have to pay a penalty. This includes Medicaid and Medicare. Individual health insurance purchased directly from a carrier or through a state or federal insurance marketplace also qualifies as minimum essential coverage.. Limited coverage such as vision or dental insurance, workers compensation and disability coverage do not apply.
Here are some other types of coverage that qualify:
- The Children’s Health Insurance Program (CHIP)
- Veterans health coverage
- Peace Corps volunteer plans
- Self-funded health coverage offered to students by universities for plan or policy years that begin on or before Dec. 31, 2014
If you are currently uninsured and are looking for health insurance, call HealthMarkets Insurance Agency. Our agents can help you understand what’s available, select the plan that meets your needs and budget, and help you apply for coverage. We’ll even help you determine whether you qualify for a government subsidy that could cover up to 100% of your premium cost. Best of all, our help is available at no cost to you.
HealthMarkets Insurance Agency is the d/b/a or assumed name of Insphere Insurance Solutions, Inc. which is licensed as an insurance agency in all 50 states and the District of Columbia. Not all agents are licensed to sell all products. Service and product availability varies by state. Sales agents may be compensated based on your enrollment in a health plan.