As the different provisions of the Affordable Care Act are enacted, numerous changes to health care –and the health care industry in the United States can be expected. One of those provisions is the Individual Mandate. The Individual Mandate requires every legal citizen of the United States, not covered under employer sponsored health plan, Medicaid, Medicare or other public insurance program to secure a pre-approved private insurance policy. This goes into effect on January 1, 2014. However, there are certain exceptions to the Individual Mandate which we will outline here.
Who Is Exempt
When the Affordable Care Act was written, the government took into account the diversity of the American people. As a result, certain people became exempt from the Individual Mandate. You are exempt if you fall into any of these criteria:
- Persons who cannot afford the coverage
- Taxpayers who fall below the requirements for filing a tax return
- Members of Federally recognized Native American Tribes
- Federally recognized members of religious sects – these sects must have been in existence prior to 1950
- Members of a federally recognized health sharing ministry
- Legal citizens of the United States who are incarcerated
- Individuals who are not legal citizens of the United States, yet are living within the country.
- Individuals who experience short gaps of three months or less in their insurance coverage.
- Individuals who qualify for a hardship exemption. Hardship qualifications include:
- Eviction within the last six months
- Individuals / families who are homeless
- Those who have filed bankruptcy within the last six months
- A shut off notice from a utility company
- The death of a family member who previously was a major contributor to the household finances
- Certain cases of domestic violence
- Your home has been damaged due to natural disaster.
The Mandatory Factors
Any individual who has coverage from any of the following health insurance programs need not worry about finding insurance or having to pay a penalty:
- Any employer sponsored medical coverage – Including COBRA and retiree coverage
- Coverage purchased at the Health Care Marketplace
- Medicaid and CHIP
- Certain types of Veterans health care coverage
The Health Care Marketplace opened on October 1, 2013 and is available for individuals, families and small businesses owners to purchase approved health insurance which will take effect on January 1, 2014. Anyone failing to do so, and is not a part of the exempted list, will be subjected to an annual penalty of either 1% of their income or $95 for each individual. This fee will rise to 2.5% of your annual income or $695 for each individual in the year 2016.
The enrollment period for coverage in 2014 will close on December 15, 2013.