by Stacy Malone, Marketing Intern
You and your employees care about this! The Obamacare individual mandate requires that individuals and their dependents have minimum essential coverage, or else they will pay an annual tax penalty for any month they lack coverage. The penalty will be the greater of either a flat dollar amount per individual or a percentage of the individual’s taxable income. The flat dollar amount is $95 in 2014, $325 in 2015, and $695 in 2016. After 2016, the flat dollar tax will be indexed to inflation, and is capped at 300% of the flat dollar amount. The percentage of taxable income is an amount equal to a percentage of a household’s income that is in excess of the tax filing threshold. It will be 1% in 2014, 2% in 2015, and then 2.5% in 2016.
You have minimum essential coverage under Obamacare if you have insurance through any of the following means: Medicare, Medicaid, Tricare, veteran’s health program, a plan offered by an employer that complies with Obamacare (also called the Affordable Care Act or ACA), insurance that has been bought on your own and is at least Bronze level, or a grandfathered health plan that existed before enactment of the health reform law and meets Obamacare requirements.
You are also exempt from a penalty if any of the following apply to you:
- You’re part of a religion opposed to accepting benefits from a healthcare policy.
- You’re incarcerated.
- You’re an undocumented immigrant.
- You’re a member of a Native American tribe.
- Your family income is below the threshold for filing a tax return.
If you either have minimum essential coverage or are exempt, you will not pay a penalty.
As you can see, Obamacare will really change how healthcare is handled. Some people may decide that it will be better to pay the penalty, while others might find it better to purchase healthcare. Whatever you decide, these are going to be big changes for individuals, businesses, and healthcare systems. You can find more information on the individual mandate and Obamacare by going to www.EmployersAndObamacare.com.
