How does the Affordable Care Act (ACA) affect me?

The Affordable Care Act (ACA) will begin to impact individuals now. Beginning in 2014, the ACA requires individuals to maintain minimum essential health insurance coverage with some exceptions. Minimum essential health insurance coverage includes:

  • Eligible employer-sponsored coverage;
  • Individual coverage;
  • Medicare and Medicaid;
  • State Children’s Health Insurance Program (CHIP);
  • Department of Veterans Affairs health care program;
  • Peace Corps program.

The first thing to do is to determine if your employer’s plan meets the minimum essential coverage.

Every employer that provides minimum essential coverage must provide this information to each primary insured person.

Individuals exempt from the mandates include:

  • Individuals with qualifying religious exemptions;
  • Individuals whose household income is less than the filing threshold for federal income tax purposes ($10,000 single taxpayer; $16,100 married-filing-joint taxpayer);
  • Individuals whose required contribution for self-only coverage exceeds 8% of household income.

Penalties for noncompliance include:

The greater of:

  • $95 for each taxpayer and any dependents, or
  • 1% of applicable income (amount household income exceeds the filing threshold).

The individual mandate penalty will be assessed on the individual’s 2013 Form 1040.

There is a Premium Tax Credit available to people who:

  • Buy health insurance through the Marketplace;
  • Ineligible for coverage through an employer or government plan;
  • File a joint return, if married;
  • Cannot be claimed as a dependent by another person; and
  • Are within certain income limits:
    • Individuals up to $45,960;
    • Family of two up to $62,040;
    • Family of four up to $94,200.

You can get the Premium Tax Credit

  • Now: Have some or all of the estimated credit paid in advance directly to your insurance company; or
  • Later: Wait to get all of the credit when you file your 2014 tax return in 2015.