ACA Individual Mandates


ACA INDIVIDUAL MANDATE

 

Individuals: What you need to know about the Affordable Care Act

Every citizen and permanent United States resident is required to have health insurance or pay a penalty. The insurance can be obtained through your place of employment, your spouse’s workplace, the military, purchased on the Marketplace Exchange, through a government assistance program like Medicare or Medicaid, or Cobra- if you are a terminated employee who was enrolled in your employer’s plan.

The penalty for not having health insurance in 2014 is $95 for individuals or 1% of your income, whichever is greater. In 2015 that penalty increases to $325 or 2% of income, and in 2016 it will be $695 or 2.5% of taxable income. After 2016, the penalty increases will be annually tied to the cost of living adjustment.

 

Four Tiers or Levels of Insurance

  • Platinum Tier – 90% of coverage with the least out-of-pocket cost to you.
  • Gold Tier– 80% of coverage with increased out-of-pocket cost to you.
  • Silver Tier – 70% of coverage with additional increased out-of-pocket cost to you.
  • Bronze Tier – 60% of coverage with the highest out-of-pocket cost to you.

You have the option to choose from one of the four ‘metal’ tiers of health coverage. There are several plans from which to choose within each metal tier, each having a limit for out-of-pocket spending.

The premium cost for each metal tier varies, with Platinum being the most expensive and Bronze being the least expensive. In addition, you should consider your out-of-pocket costs which you pay through deductibles, co-pays, and coinsurance- Platinum plans have the least out-of-pocket costs to you, and Bronze plans have the highest.

 

You Might Qualify for a Spending Cap

If your annual income falls somewhere between 100% – 400% of the Federal Poverty Line (FPL) then the cap on out-of-pocket expenses will be lower, and you might qualify for a credit.

For example, if your income is:

  • 100-200% FPL: one-third of the HSA limits
  • 200-300% FPL: one-half of the HSA limits
  • 300-400% FPL: two-thirds of the HSA limits

 

You Might Qualify for a Tax Credit

Depending on your income level, you might qualify for a tax credit applied toward your premium when purchasing health insurance on the Exchange. Those with annual incomes between 133% – 400% of the Federal Poverty Line (FPL) will have their premium contributions capped at a maximum of 9.5% of their income when purchasing a Silver level plan.

For example, if your income is:
  • Up to 133% of the FPL = your maximum premium contribution will be 2% of your annual income
  • 133-150% of the FPL = your maximum premium contribution will be 3 – 4% of your annual income
  • 150-200% of the FPL = your maximum premium contribution will be 4 – 6.3% of your annual income
  • 200-250% of the FPL = your maximum premium contribution will be 6.3 – 8.05% of your annual income
  • 250-300% of the FPL = your maximum premium contribution will be 8.05 – 9.5% of your annual income
  • 300-400% of the FPL = your maximum premium contribution will be 9.5% of your annual income

The premium tax credit is determined by subtracting the difference between the individual’s maximum premium contribution and the unsubsidized cost of the second lowest Silver level plan offered in an individual’s geographic area.