Skip to Main Content

The Individual Mandate

Increasing the number of Americans who have health insurance is a primary objective of the Affordable Care Act. That’s why the reform law has coverage requirements for individuals.

Most U.S. citizens and legal residents have to be enrolled in a health insurance plan that meets minimum essential coverage. People currently insured through an employer or a plan they bought on their own likely meet the requirement already. So do those enrolled in a Medicare plan, TRICARE, Medicaid, and a few other programs.

People who are exempt from the requirement are those who:

  • would have to pay more than eight percent of their income for health insurance,
  • have incomes below the threshold required for filing taxes, or
  • qualify for religious exemptions.

Also exempt are:

  • undocumented immigrants,
  • people who are incarcerated, and
  • members of Native American tribes.

People who are required to have health insurance but choose not to buy it will be required to pay a penalty when filing their taxes.  

Tax penalties (pay the greater of the following)
Year Percentage of family income Set dollar amount
2014 1% $95 per adult and $47.50 per child (up to $285 for a family)
2015 2% $325 per adult and $162.50 per child (up to $975 for a family)
2016 and beyond 2.5% $695 per adult and $347.50 per child (up to $2,085 for a family)

The total penalty for the taxable year will not exceed the national average of the annual premium for a bronze-level plan offered through the health insurance marketplaces.