The Obama administration announced final regulations implementing the requirement that most Americans have health insurance coverage by Jan. 1 or pay a fine. When filing 2014 taxes in 2015, individuals must indicate on their returns if they have health insurance coverage and, if not, pay a fine. The individual penalty is the greater of $95 or 1 percent of income, rising to the greater of $695 or 2.5 percent of income, in 2016. The Congressional Budget Office estimates that less than 2 percent of Americans who don’t have health insurance will pay the fine.
The regulations specify nine categories of individuals who are exempt from the mandate:
- Religious conscience: You are a member of a religious sect that is recognized as conscientiously opposed to accepting any insurance benefits. The Social Security Administration administers the process for recognizing these sects according to the criteria in the law.
- Health care sharing ministry: You are a member of a recognized health care sharing ministry.
- Indian tribes: You are a member of a federally recognized Indian tribe.
- No filing requirement: Your household income is below the minimum threshold for filing a tax return. The requirement to file a federal tax return depends on your filing status, age, and types and amounts of income. To find out if you are required to file a federal tax return, use the IRS Interactive Tax Assistant (ITA).
- Short coverage gap: You went without coverage for less than three consecutive months during the year.
- Hardship: A Health Insurance Marketplace, also known as an Affordable Insurance Exchange, has certified that you have suffered a hardship that makes you unable to obtain coverage.
- Unaffordable coverage options: You can’t afford coverage because the minimum amount you must pay for the premiums is more than eight percent of your household income.
- Incarceration: You are in a jail, prison, or similar penal institution or correctional facility after the disposition of charges against you.
- Not lawfully present: You are neither a U.S. citizen, a U.S. national, nor an alien lawfully present in the U.S.
You can view a fact sheet summarizing the final regulation here.
You can view the final regulation in its entirety here.
You can find a Q&A on the Individual Shared Responsibility Provision here.