Affordable Care Act

HealthcareReformStarting January 1, 2014, the Affordable Care Act requires nearly all U.S. citizens and legal residents to have health insurance.   The penalty in 2014 is calculated one of 2 ways. You’ll pay whichever of these amounts is higher:

• 1% of your yearly household income. The maximum penalty is the national average yearly premium for a bronze plan.

        • $95 per person for the year ($47.50 per child under 18). The maximum penalty per family using this method is $285.

The fee increases every year. In 2015 it’s 2% of income or $325 per person. In 2016 and later years it’s 2.5% of income or $695 per person. After that it is adjusted for inflation. To avoid the fee you need insurance that qualifies as minimum essential coverage, If you’re covered by any of the following in 2014, you’re considered covered and don’t have to pay a penalty:

• Any Marketplace plan, or any individual insurance plan you already have

• Any employer plan (including COBRA), with or without “grandfathered” status. This includes retiree plans

• Medicare

• Medicaid

• The Children’s Health Insurance Program (CHIP)

• TRICARE (for current service members and military retirees, their families, and survivors)

• Veterans health care programs (including the Veterans Health Care Program, VA Civilian Health and Medical Program (CHAMPVA), and Spina Bifida Health Care Benefits Program)

• Peace Corps Volunteer plans

Other plans may also qualify. Ask your health coverage provider.

Through the new Health Insurance Marketplace, you may qualify for a premium tax credit to help pay for your coverage.   Use the subsidy calculator to determine if you are eligible.

Federal Poverty Levels (which are also called Federal Poverty Guidelines, federal Poverty Line or simply FPL) are used to see if you qualify for cost assistance when buying insurance through your State Health Insurance Marketplace.

They are also used to see if you are eligible for Medicaid (though this depends on rules adopted by your State), give exemptions from the requirement to purchase insurance, or to see if you will have to pay some of the Affordable Care Act’s taxes on higher earners.

As a rule of thumb if your family income is less than four times the published Federal Poverty Guideline (400% of FPL) for your household size, and you are not eligible for employer or other public assisted healthcare (such as Medicaid or Medicare), you will be able to receive premium subsidies to help you purchase affordable insurance through your State’s Health Insurance Marketplace.




Open Enrollment Dates

October 1, 2013–Open enrollment through the marketplace
December 15, 2013–Last day for coverage to be effective Jan. 1.
March 31, 2014–Last day for open enrollment.


Although technically a “tax credit” which you will receive when you file your 2014 tax return, a tax credit advance will be paid directly to the insurance provider you choose, reducing the monthly premium you have to pay. If at the end of the year your income turns out to be more or less than expected the tax credit will be adjusted and added to or taken from any tax refund or payment due

.• If you make less than four times (400% of the FPL) you may qualify for reduced premiums through the marketplace due to advanced premium tax credits

.• If your income is below two and a half times (250%) the FPL you qualify for a policy with reduced deductibles, copayments and lower maximum out of pocket costs.