What does ACA mean to me and my family?
Health insurance can seem like a luxury when it comes to making ends meet. But the fact is that an illness or medical emergency can cost you everything you own. For example, in 2010, the average cost of a one-day stay in the hospital was $9,700. Medical tests or surgery can drive this cost much higher.
The Affordable Care Act (ACA) is designed to protect you and your family by providing low-cost insurance that covers your basic healthcare needs - from doctor's appointments and emergency visits to prescriptions and lab tests. This type of coverage is called minimum essential health insurance and under the ACA most Americans are required to have it prior to the mandated deadline.
But what if you choose not to insure yourself or your family?
While some people will be considered exempt from these penalties, others will be fined when they file their federal income taxes.
- For 2014: $95 per uninsured adult in the household and $47.50 per uninsured child under 18 (capped at $285 per household) or 1 percent of your taxable household income, whichever is greater
- For 2015: $325 per uninsured adult in the household and $162.50 per uninsured child under 18 (capped at $975 per household) or 2 percent of your taxable household income, whichever is greater
- For 2016 and beyond: $695 per uninsured adult in the household and $347.50 per uninsured child under 18 (capped at $2,085 per household) or 2.5 percent of your taxable household income, whichever is greater
Those who may be exempt from the tax penalty include:
- People whose annual insurance expense is more than a minimum prescribed percentage of their household income for the taxable year (8.16 percent in 2014)
- People who make less than required to file taxes
- People with a hardship exemption
- People who have a gap in their coverage (less than three months per year)
- People who belong to a religious group that objects to insurance
- People who belong to healthcare sharing ministries (a healthcare cost-sharing arrangement among people of similar or sincerely held beliefs)
- People in prison
- People who are not U.S. citizens, nationals of the U.S. or aliens legally present in the U.S.
- People belonging to Native American tribes
- U.S. citizens living abroad
Individuals or families who are experiencing financial challenges may be eligible for tax credits that can be used to lower insurance plan payments.