Summary: The individual mandate under the ACA is to become effective January 1, 2014.  Are there any exceptions to the mandate?

As of January 1, 2014, all Americans are required to have health insurance coverage under the Patient Protection and Affordable Care Act (PPACA). As with most rules, there are exceptions. The provisions of the PPACA have many exceptions, especially the controversial individual mandate. The controversy surrounding the individual mandate was whether the provision was a “mandate” or a “tax”. In the end, it is a mandate with penalties for non-compliance issued in the form of taxes.

There are 9 exemptions to the individual mandate under the ACA according to the Internal Revenue Service. These groups will not be assessed penalties in the form of taxes should they choose not to carry health insurance coverage.

1.       Religious beliefs

The Social Security Administration recognizes certain religious groups which are strongly opposed to health insurance coverage. If you are a member of one of these officially recognized groups, you are exempt from the individual mandate.

2.       Health care sharing ministry

If you are a member of a health care sharing ministry, you are exempt from the individual mandate.

3.       Indian tribes

If you are a member of a federally recognized Indian tribe, you are exempt from the individual mandate.

4.       No filing requirement

If your income threshold is below the level of having to file a tax return, you are exempt from the individual mandate. The threshold is currently determined based upon your filing status, your age, and the types and amounts of income you earn.

5.       Short coverage gap

If you went without insurance coverage for less than three consecutive months during the year, you are exempt from the individual mandate.

6.       Hardship

If the Health Insurance Marketplace (Health Insurance Exchanges has categorized you as experiencing a hardship which makes health insurance unobtainable, you will be exempt from the individual mandate.

7.       Unaffordable coverage options

If the minimum amount you are required to pay is more than 8% of your household income, insurance coverage is deemed unaffordable and you will be exempt from the individual mandate.

8.       Incarceration

If you are in jail, prison, or similar penal institution or correctional facility due to files charged against you, you are exempt from the individual mandate.

9.       Not lawfully present

If you are not a U.S. citizen, a U.S. national or an alien lawfully present in the U.S., you will be exempt from the individual mandate.

The purpose of the PPACA is to provide affordable insurance to more Americans with the focus of reducing the rate of uninsured individuals. As such, the individual mandate will go into effect in January 2014. Those who do not fall into one of the categories above will be forced to carry insurance or face pretty substantial penalties. The penalties set forth for 2014 are the greater of $95 for individuals or 1% of income. Higher penalties will be assessed to families. There are also plans to increase these thresholds for at least 2015 and 2016 and we could see dramatic increases in penalties beyond 2016. While insurance provides is a wonderful invention and provides peace of mind and money savings, should it be a requirement or should it be left to individual choice?

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