The Patient Protection and Affordable Care Act (also known as Obamacare) has an individual mandate and an employer mandate. However, under certain conditions it is not mandatory for an individual to obtain health insurance and for an employer to provide health insurance. This was signed into law on March 23, 2010 by President Obama. It was enacted by the 111th United States Congress and is Public Law 111-148 and is 906 pages. Note, the Employer Mandate effective date has been moved from January 1, 2014 to January 1, 2015.
Beginning January 1, 2014 it will be mandatory for all individuals to have health insurance.
Penalty for not having Health Insurance
|2014||$95 per adult and $47.50 per child, up to a family maximum of $285 or 1 percent of family income, whichever is greater.|
|2015||$325 per adult and $162.50 per child, up to a family maximum of $975 or 2 percent of family income, whichever is greater.|
|2016||$695 per adult and $347.50 per child, up to a family maximum of $2,085 or 2.5 percent of family income, whichever is greater.|
|2017 & after||Same as from year 2016 plus inflation adjustment.|
Exemptions from penalty for not having Health Insurance
- Individuals in certain religious group that have been historically exempt from Social Security System.
- Native American tribes.
- Undocumented immigrants (who are not eligible for health insurance subsidies under the law).
- Incarcerated individuals.
- Individuals whose incomes are so low they don't have to file taxes (currently $9,500 for individuals and $19,000 for married couples).
- Individuals for whom health insurance is considered unaffordable (where insurance premiums after employer contributions and federal subsidies exceed 8% of family income).
Beginning January 1, 2015 (moved from January 1, 2014) it will be mandatory for all employers with at least 50 full-time employees (or its equivalent) to provide health insurance for its employees.
- If the employer does not provide health insurance that meets the "minimum essential coverage" requirements, then the penalty will be $2,000 per year multiplied by the number of full-time employees minus 30. For example, an employer with 50 full-time employees the penalty would be: (50 - 30) x $2,000 = $40,000
- If the employer does provide health insurance but at least 1 of the full-time employees contributes more than 9.5 percent of the W-2 wages for the health insurance; and obtains health insurance through the public exchange; and receives a subsidy for health insurance; then the penalty for the employer will be $3,000 annually per employee receiving the subsidy. For example, say an employer with 50 full-time employees provides health insurance to all of them. However, 5 of the full-time employees each receive a subsidy, then the penalty would: 5 x $3,000 = $15,000.