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The 5 W’s of the Affordable Care Act Individual Mandate

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To shed light on the Affordable Care Act individual mandate certain questions need to be answered. They pertain affordable care act individual mandateto what, who and when. More specifically, they are: What is the affordable care act individual mandate? When did the mandate go into effect? Who must comply with it? What are the consequences of not complying? When will the consequences apply? Okay. Let’s cut to the chase.

What is the Affordable Care Act individual mandate?

It is the requirement for most residents of the United States to purchase health insurance which provides the essential health benefits as stated in the Affordable Care Act or face a penalty.

When did the mandate go into effect?

Individuals who are not exempt must have enrolled in an Affordable Care Act insurance plan beginning on January 1, 2014.

Who must purchase ACC insurance?

This question is best answered by discussing who is exempt from having to comply. Every citizen and legal resident must purchase health insurance except for the following:

  • Individuals insured for a whole year through one or a combination of the following insurance plans:



Children’s Health Insurance Program


Veteran’s Health Program

A plan offered by an employer

A previously purchased health plan of at least the bronze level

A grandfathered health plan

  • Undocumented immigrants
  • Members of an Indian tribe
  • Incarcerated individuals
  •  Individuals who belong to a religious group that is opposed to accepting benefits from a health insurance policy based on beliefs of that religion
  • Individuals whose household income is less than the threshold for filing an income tax return ($10,150 for an individual and $20,300 for a family and 2014)
  • Certain low-income individuals who cannot afford coverage due to hardship, or that live in states that opted out of Medicaid expansion  

What is the Affordable Care Act tax penalty?

  • In 2014 the penalty is a tax of $95 per adult and $47.50 per child up to a maximum of $285 for a family household or 1% of the family household income (whichever is greater).
  • In 2015 The penalty will go up to $325 per adult and $162.50 per child (up to a maximum of $975 per family household) or 2% of the family household income (whichever is greater).
  • In 2016 the penalty will increase to $695 per adult and $347 per child (up to $2085 for a family household) or 2.5% of the household income (whichever is greater).
  • After 2016 the penalty will be increased annually based on increases in the cost of living.

When will the penalty be assessed?

The penalty is assessed once a person who is not exempt has been without qualifying insurance for three months out of the year. The penalty is calculated based on the number of months that you have been without insurance. For example, if you have been without insurance for six months out of the year that is half the year. Accordingly, your tax penalty would be 50% of the standard amount.




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