If you can afford health insurance and you don’t have coverage in 2016, you may have to pay a fee of 2.5% of your yearly household income or $695 per person ($347.50 per child under 18). This is considerably higher than the fees when the marketplace began in 2014 (1% of your yearly income or $95 per person ($47.50 per child), whichever was higher).
To avoid the fee, you need coverage that qualifies as minimum essential coverage. For 2016, you will be considered covered (and won’t have to pay a fee) if you have any of the following plans:
- Any employer plan (including COBRA)
- Any individual insurance plan that you already have
- Any Marketplace plan
- Most Medicaid coverage
- Medicare Part A and Medicare Advantage Plans
- Peace Corps Volunteer plans
- The Children’s Health Insurance Program (CHIP)
- TRICARE (active and retired military, families and survivors)
- Certain types of veteran's health coverage administered by the Veteran's Administration
- Coverage under the Non-Appropriated Fund Health Benefit Program
- Refugee Medical Assistance supported by the Administration for Children and Families
- Self-funded health coverage offered to students by universities (there are specific rules for which plans are covered)
- State high risk pools for plan or policy years that begin on or before Dec. 31, 2014
If you don’t have coverage in 2016 you may not have to pay the fee if you fall under these exemptions:
- Are a member of a federally recognized Indian tribe
- Are insured for at least nine months of the year
- Don’t have to file a tax return because of low income
- Have a very low income and you cannot afford coverage (you must complete an application on the Marketplace to determine whether your income qualifies you for an exemption)
- Participate in a healthcare sharing ministry
- Are incarcerated
- Would qualify for Medicaid (under the new income limits) but your state has chosen not to expand eligibility
- Are a member of a recognized religious sect (such as the Amish and some Mennonite sects) that objects to health insurance
Tip: What determines if you can afford coverage? The IRS determines affordable coverage. Coverage is not considered affordable if it costs more than 8% of your annual household income or if your income falls below income-tax thresholds.Important Dates to Know
InsuranceIf you didn't have health insurance last year – or miss this year's deadline – how is the Affordable Care Act penalty enforced?
InsuranceFollow these 4 steps to get the best coverage at the most affordable price.
InsuranceUnderstand the need for health insurance and why some undervalue the need for coverage. Learn about the top seven mistakes to avoid when purchasing insurance.
Financial AdvisorIs group term life insurance really a good deal? What you need to know about employer-sponsored group term life insurance coverage.
InsuranceFind out to determine how much car insurance you actually need with this overview of the different types of coverage available in your policy.
InsuranceYes, if you've no other coverage options. Here’s what you need to know about how it works and how it differs from employer-provided and marketplace plans.
InsuranceHere's how you may be able to lower your costs for health insurance coverage in 2016 though the Health Insurance Markerplace.
InsuranceThis breakdown of coverage into its component parts will provide the answer.
InsuranceNot sure how the Health Insurance Marketplace/Exchange works? Here are 5 ways to avoid frustration when enrolling through the federal or state exchanges.