What You Need to Know
The Affordable Care Act, also known as “health care reform,” has brought big changes to the U.S. health insurance system. Many of the biggest changes will start on January 1, 2014.
You Must Have Insurance
Most Americans will be required to have health insurance, or pay a penalty. This is commonly referred to as the “individual mandate.” The good news is that you cannot be turned down for insurance, regardless of medical history or ability to pay. That will make it easier to find insurance and avoid the penalty.
The penalty is $95 per adult* in 2014, and it will increase significantly in 2015 and 2016. You will not have to pay the penalty if:
- You have insurance through your employer.
- You buy insurance on your own.
- You have insurance through Medicare, Medicaid, the Children's Health Insurance Program (CHIP), the Veteran's Administration and/or Tricare for active duty and retired military, Indian Health Services, or a health care sharing ministry.
- You must pay more than 8% of your household income to buy the least expensive health insurance plan that's available to you, even after you consider any financial help you may be eligible for. Note that the income cutoff for avoiding the penalty (more than 8%) is different than the income cutoff (less than 9.5%) that is used to define affordable employer coverage.
- You qualify for a hardship. This applies if you aren't eligible for Medicaid because your state chose not to expand Medicaid, or if you have a personal or financial issue that keeps you from being able to afford insurance.
- You have a gap in health insurance coverage for less than three consecutive months in a calendar year.
- You don't make enough money to file a federal income tax return.
- You live outside of the U.S.
- You’re in one of these categories: undocumented immigrants, people who are in jail, members of Native American tribes, and those who qualify for a religious exemption.
Keep in mind that you will have to prove you're covered. After you enroll, you'll get a form from your insurance company that says you have the minimum coverage. You'll need to submit that new form with your federal tax return.
*For 2014, the penalty is the greater of $95 per adult and $47.50 per child (up to $285 per family), or 1% of your family income.
More Health Insurance Options Will Be Available
To give more people access to health insurance:
- You'll have the option to buy insurance through a state or federal marketplace, or “exchange.” Put simply, a marketplace is a website where health insurance companies come together to give you a place to shop for health insurance. That way, you have one place to compare options for private health insurance side by side. Financial help may be available to you for insurance that you buy through the marketplace.
- Additionally, beginning in 2015, all employers with 50 or more employees will be required to offer health insurance to full-time employees (that is, employees who work 30 or more hours a week). This is commonly referred to as the “employer mandate.” That doesn't mean you have to buy health insurance through your employer–it just means it must be available to you.
If you can't afford the health insurance offered to you through your employer or in a marketplace, you may qualify for Medicaid or the Children's Health Insurance Program. Each state has its own eligibility requirements for these programs.