The Affordable Care Act

What Individuals & Families Need to Know

Beginning in 2014, individuals are required to do one of the following:

  • Maintain basic health insurance coverage (known as minimum essential coverage) for themselves and any of their dependents
  • Qualify for an exemption
  • Pay a shared responsibility payment (a penalty)

You can avoid the penalty if you and your dependents are enrolled in a qualified employer-sponsored plan or other qualifying plans. Other qualifying plans include the following:

  • A qualified health plan offered by an Exchange
  • A government plan, such as Medicare, Medicaid or CHIP (Children’s Health Insurance Program)
  • Any other health coverage plan recognized as affording minimum essential coverage
    • Note that minimum essential coverage does not include workers compensation insurance, disability insurance, dental or vision benefits, long-term care benefits, or Medigap or MedSupp insurance.

For 2014, the penalty for not having qualifying health coverage (or qualifying for an exemption) is the greater of:

  • 1% of your household income that is above the tax return filing threshold for your filing status (with a maximum penalty in 2014 of $2,448 per individual, per year)
  • or: $95 per adult, and $47.50 per child, limited to a family maximum of $285

A few of the exemptions from being required to maintain minimum coverage or pay a penalty are:

  • Lapse in coverage for less than 3 consecutive months
  • Non-U.S. citizen
  • Incarcerated individual
  • Member of certain religious sects or health care sharing ministries
  • Member of an Indian tribe
  • Low income taxpayers under the statutes definition as low income
  • Taxpayers for whom basic coverage is unaffordable
  • Taxpayers who qualify under a hardship

You can find more information, and a complete list of exemptions, on the following IRS webpage: https://bit.ly/ACA-Individuals

The above is a very simplified explanation of the individual mandate. Please call us at (925) 271-8700 if you would like to discuss how this requirement will affect you and your family. Also, learn more about how our Estate & Trust team can help you plan for your future.

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