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What is the individual mandate under obamacare?

Here's what you need to know...
  • The individual mandate applies to all citizens, nationals, and some other legal residents
  • The mandate requires qualified health insurance coverage
  • Those who fail or refuse may have to pay a shared responsibility penalty
  • The penalty applies to all without coverage unless exempt for hardship or other reasons

The Individual Mandate in the Affordable Care Act is the requirement that everyone get and maintain a qualified health plan or pay a shared responsibility fee. The goal of the mandate is to encourage participation and pay the costs to the public for non-compliance. The government grants exemptions from the individual mandate to those below the tax filing threshold, dependent upon Supplemental Security Income, and earning less that the federal poverty guideline amount. Comparison shopping is the best way to assess the value of Obamacare plans to the consumer’s individual or family health care needs. Start comparing health insurance rates and providers now by using our FREE tool above!

The Penalties

The shared responsibility penalty will ultimately equal the price of a benchmark bronze plan. The phased-in penalties grow through 2016 where they take on the price of a plan. There are exemptions for hardships and many other factors beyond the individual’s control. One such factor is the availability of affordable insurance. Affordable health insurance must not exceed 8 percent of annual income or 9.5 percent of adjusted income when offered by and employer. The below listed items describe the current penalties.

  • The 2015 penalty is $325 for an adult
  • The 2015 penalty is $162.50 for a child
  • The 2015 family maximum is $975.00 or 2.0 percent of adjusted family income.
  • The 2016 penalty is $695 for an adult
  • The 2016 penalty is $ 347.50 for a child
  • The 2016 family maximum is $2,085.00 or 2.5 percent of adjusted family income

Open Enrollment

The Individual mandate requires every person to get and maintain health insurance unless exempt. The annual period for sign-up, change, and renewal of a qualified health plan is the Open Enrollment. The 2016 calendar year coverage, the Open Enrollment runs from November 1, 2015, to January 31, 2016. Those who fail to enroll during this time may not do so until the next enrollment period unless they qualify for an exception such as a Life Event change of status.

Life Events

After Open Enrollment, Obamacare marketplaces close to open signups, and private plans follow the lead because they too base their plans and prices on time sensitive information. The primary exceptions are hardships and Life Events. The Life Events exceptions include the below-listed occurrences.

  • Marriage
  • Divorce
  • Childbirth or adoption
  • Move to a different state
  • Loss of insurance as a dependent( 26th birthday)
  • Loss of insurance due to job loss

Types of Plans to Meet the Mandate

There are four types of plans on the Obamacare marketplace. The government ranks them by the amount of insurance payment versus costs to the consumer. Called actuarial value, these ratings have metal names of platinum, gold, silver, and bronze to help consumers compare similar amounts of coverage. The below list of items describes the coverage value of the four types of plans.

  1. Platinum plans have an actuarial value of 90 percent and provide low deductible and out of pocket costs. They have high premiums.
  2. Gold plans cover 90 percent of plan costs on average. They have moderately high deductibles and out of pocket costs and high premiums.
  3. Silver plans are versatile some have high deductibles but also accept health savings plans. These plans get payment assistance benefits and subsidies for those that qualify.
  4. Bronze plans cover sixty percent or more of plan costs. They are the most popular plans and a high percentage of consumers get premium tax subsidies.
  5. Catastrophic Coverage is open only to those under 30, and for limited use and by those who cannot qualify for better coverage.

Year-round Medicaid and CHIPs

There is no Open Enrollment for Medicaid and CHIP coverage for children. If eligible, adults and children can initiate coverage at any time. Medicaid coverage contains the essential health benefits of qualified health plans and satisfies the individual mandate. If determined not to be eligible for Medicaid because of too high income and too low for marketplace programs, one may qualify for an exemption.

The Individual Mandate Encourages Participation

The Affordable Care Act uses the individual mandate to increases participation in health insurance coverage. The goal of the individual mandate is to improve health in the United States by reducing the incidence and costs of preventable illnesses and premature deaths. By eliminating denials of coverage, and removing grounds for price discrimination, the Affordable Care Act brings coverage to millions of uninsured Americans. By adding preventive care and guarantees of no cost basic services, the nation has a path to improved health and greater wellness. Comparison shopping on and off the marketplace is the preferred way to find the most beneficial health plan for an individual or family. Start comparing health insurance rates now by entering your zip code in our FREE tool below!

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