The government will require most Americans to have health insurance by 2014. The government has enacted this provision as a way to get healthy people who don’t feel the need to pay for coverage to buy insurance. That way, the healthy people can help fund the cost of people who require more medical care.
Several states filed, and lost, a suit against the federal government saying that it is unconstitutional to make individual citizens to buy health insurance.
If you don’t have coverage and you’re not in one of the groups that is an exception to the rule, you’ll pay a penalty. You may not be required to purchase health insurance if you
- Face financial hardships.
- Have been uninsured for less than three months.
- Have religious objections.
- Are American Indian.
- Are a prison inmate.
- Are an undocumented immigrant.
If you’re penalized, the amount you’ll be fined will go up each year for the first three years. In 2014, you’ll pay $95 or 1 percent of your taxable income, whichever is greater. In 2015, the fine will be $325 or 2 percent of taxable income, and in 2016 the penalty will be $695 or 2.5 percent of income. Each year after 2016, the government will refigure the fine based on a cost-of-living adjustment.
To help you meet the cost of mandated insurance, the government will offer premium credits and cost sharing subsidies if you and your family meet certain income guidelines and if you enroll in one of the new state-run insurance exchanges.
If your income falls between 133 and 400 percent of the federal poverty level (FPL), you could receive premium credits that will lower the maximum amount of premium you have to pay for your coverage.
For example, if your income is 133 percent of FPL, you won’t have to pay more than 2 percent of your income in premiums. At the high end of the range, if your income is 400 percent of FPL, your premium costs won’t be more than 9.5 percent of your income. FPL is $10,830 for an individual and $22,050 for a family of four.
You could also receive a cost-sharing credit to help reduce your out-of-pocket expenses for deductibles and co-pays. Like the premium credits, the amount of cost-sharing credit you receive will be based on your income in relation to FPL.
