For tax years beginning after 2013, U.S. Citizens and legal residents, with few exceptions, will be required to maintain health insurance coverage.
A number of programs such as Medicare, Medicaid, eligible employer-sponsored plans, plans in the individual market, certain grandfathered group plans and other plans recognized by Health and Human Services (HHS), will be approved to provide this coverage.
The coverage requirement does not apply to:
Others may apply to HHS for an exemption due to hardship in obtaining coverage.
In a recent report, the Congressional Budget Office (CBO) has estimated that, beginning in 2014, approximately 6 million people will pay a penalty tax for not carrying this coverage. The monthly penalty for failure to maintain this coverage will be equal to 1/12 of the greater of a flat dollar amount or a percentage of household income (reduced by the dollar threshold for filing) starting at 1.0% in 2014, rising to 2.5% by 2016 and adjusted for inflation thereafter.
The flat dollar rate is set at $95 for 2014, $325 for 2015, $695 for 2016 and adjusted for inflation thereafter.
Since this estimate is considerably higher than the original 2010 estimate, get set for more heated political debate over the Affordable Care Act.