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The Individual Mandate for Individual Arizona Health Insurance

One of the most controversial provisions of the Affordable Care Act (Obamacare) is a mandate for most individuals to have health insurance beginning in 2014, or potentially pay penalty for not getting it. Individuals will be required to maintain minimum essential coverage both for themselves and their family members. However, some people will be exempt from the mandate or from the penalty, while others may receive financial assistance to help them pay for the cost of health insurance.

What's included in minimal essential coverage?

This  includes some coverage that is in effect now, along with other plans that will be instituted as part of health reform.

It includes coverage under certain government sponsored plans; employer-sponsored plans, with respect to any employee; plans in the individual market, offered by private carriers; grandfathered health plans and any other health benefits coverage, such as a state health benefits risk pool that is recognized by the HHS secretary.

It does not cover health coverage that consists of "excepted" benefits, such as dental-only insurance.

Essential health benefits are required to be offered by certain plans starting in 2014. This is different from the minimum essential coverage, which is the coverage needed to avoid the individual mandate penalty. Minimal essential coverage does not have to include essential benefits.

 Maternity coverage, for example, is an essential benefit.

If you don't have coverage in 2014, you will be penalized. The penalties gradually increase until 2016.

1. In 2014, the penalty is the greater of $95 per insured person, or 1 percent of the household income over the filing threshold.
2. In 2015, it is $325 per uninsured person or 2 percent of the household income over the filing threshold.
3. In 2016 and beyond, it is $695 per uninsured person or 2.5 percent of the household income over the filing threshold.

There is a family cap on the flat dollar amount of 300 percent, although there is no cap on the percentage of income test. The overall penalty is capped at the national average premium of a "bronze" level plan purchased through an exchange. (The federal government has classified plans to be sold through the health exchanges as "platinum, gold, silver and bronze," based on the level of benefits they offer). The penalty is one-half of the amounts listed above for an individual age  18 and under.

Beginning in 2017, the penalty will be increase by a cost-of-living adjustment.

There are some exemptions from the mandate. They include people who get a religious exemption, those not lawfully present in the United States and incarcerated individuals.
Some other exemptions that could apply include:

1. *A person who cannot afford coverage based on formulas contained in the law
2. *A person who has an income below the federal income tax filing threshold
3. *Members of Indian tribes
4. *Someone who was uninsured for short coverage gaps of less than three months
5. *Someone who has received a hardship waiver, or who is residing outside the United States, or who is a legal resident of any territory of the United States such as Guam of American Somoa.  

 

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