Healthcare Reform, Individual Mandate

There are so many rules and penalties in the individual mandate it can be very confusing. First thing to know is the individual mandate starts in January 2014, The individual mandate requires people who live in the United States to buy a minimum amount of healthcare coverage. There are some exemptions but not many.

So you may be wondering how are these new laws enforced? Well, Health Care Reform is all going to be tied to your annual taxes. Starting in 2014 when you file your taxes you will be required to report whether you had health insurance. Health insurance includes, group plans, individual plans, Medicaid, and Medicare. If you do not have health care coverage you can face a tax penalty, which will affect your tax return or the amount you owe. In 2014 the penalty will be $95 or 1% of your taxable earnings whichever is larger. This penalty increases to $ 325 or 2% in 2015 and $695 or 2.5% in 2016. So far the government has only released the first 3 years of penalties but it is assumed the penalty will increase each year.

Some Americans cant afford health care in these cases they may qualify for a tax credit based on the families household income. Basically it is based on poverty level. Any family that is earning 100%-400% of the federal poverty level can qualify so long as they aren’t eligible for other sources of minimal essential coverage such as government sponsored Medicaid or Medicare.

Current Poverty levels for the continental United States are as follows:

Persons in family/household: Poverty guideline
1: $11,490
2: $15,510
3: $19,530
4: $23,550
5: $27,570
6: $31,590
7: $35,610
8: $39,630

For families/households with more than 8 persons, add $4,020 for each additional person.

This is the most basic explanation of what is to come in Healthcare for the individual. Still confused? Don’t worry if you are following this blog there will be many posts about this topic in the coming months. Feel free to ask any additional questions in the comments section.