Beginning in 2014, the mandatory health insurance coverage provisions of the Patient Protection and Affordable Care Act (ACA) go into effect. But the law does not require everyone to have health insurance, nor are all of the coverage requirements applicable to all types of health insurance.
Are You Exempt from the Health Insurance Mandate?
Most U.S. citizens and legal residents are required to have health insurance beginning in January 2014 or face a penalty tax that can be as high as 1% of taxable household income exceeding the taxpayer’s federal income tax filing threshold (increasing to 2% in 2015, and 2.5% in 2016). You can avoid the penalty tax if you already have health insurance for the entire year, and the coverage is obtained from one of the following:
- Medicare
- Medicaid or the Children’s Health Insurance Program (CHIP)
- TRICARE (for service members, their families, and retirees)
- The veteran’s health program
- Employer-provided health coverage
- A policy you purchase on your own that’s at least at the Bronze level
- A plan that is grandfathered (in existence prior to the enactment of the ACA that meets the requirements of grandfathered plans under the law)
However, certain groups are not required to be insured and thus are not subject to the penalty tax. The ACA specifically excludes people who are members of an exempt religious sect or division, members of a health-care sharing ministry, Native Americans, undocumented immigrants, incarcerated individuals, people whose income is so low that they don’t have to file federal income taxes, and people eligible for a hardship exemption (when the cost of insurance after employer contributions and federal subsidies exceeds 8% of their income).
What Types of Insurance Are Not Affected by the Health-Care Reform Law?
The health-care reform law does not apply to automobile insurance, homeowners insurance, and umbrella liability coverage, even though they provide some health-related coverage. Also not subject to the law’s provisions are life, accident, disability, long-term care, and workers’ compensation insurance. Medigap (Medicare supplement) insurance is generally not covered by the ACA if it’s sold as a separate plan and not as part of a comprehensive health insurance policy. In addition, retiree-only plans are exempt from the ACA’s provisions. These plans are group health insurance plans with fewer than two participants who are current employees.
For more consumer information about enrolling in a health insurance plan, government subsidies, and tax credits, visit the U.S. government’s website, www.healthcare.gov.
If you have questions, contact the Insurance Experts at Henssler Financial: experts@henssler.com or 770-429-9166.
Disclosures
The following information is reprinted with permission from Forefield, a division of Broadridge Financial Solutions, Inc. This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
