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What if someone doesn't have health coverage in 2014?


If someone who can afford health insurance doesn't have coverage in 2014, they may have to pay a fee. They also have to pay for all of their health care.

The fee is sometimes called the "individual responsibility payment," "individual mandate," or penalty.

When the uninsured need care

When someone without health coverage gets urgent—often expensive—medical care but doesn't pay the bill, everyone else ends up paying the price.

That's why the health care law requires all people who can afford it to take responsibility for their own health insurance by getting coverage or paying a fee.

People without health coverage who pay the penalty will also have to pay the entire cost of all their medical care. They won't be protected from the kind of very high medical bills that can sometimes lead to bankruptcy.

The penalty in 2014 and beyond

The penalty in 2014 is calculated one of 2 ways. You'll pay whichever of these amounts is higher:

  • 1% of your yearly household income. The maximum penalty is the national average yearly premium for a bronze plan.
  • $95 per person for the year ($47.50 per child under 18). The maximum penalty per family using this method is $285.

The fee increases every year. In 2015 it’s 2% of income or $325 per person. In 2016 and later years it’s 2.5% of income or $695 per person. After that it is adjusted for inflation.

If you’re uninsured for just part of the year, 1/12 of the yearly penalty applies to each month you’re uninsured. If you’re uninsured for less than 3 months, you don’t have a make a payment.

Learn more about the individual responsibility payment from the Internal Revenue Service.

Enroll by March 31, 2014 and you won’t have to make the individual shared responsibility payment

If you enroll in a health insurance plan through the Marketplace by March 31, 2014, you won’t have to make the payment for any month before your coverage began.

For example, if you enroll in a Marketplace plan on March 31 your coverage begins on May 1. If you didn’t have coverage earlier in the year, you won’t have to pay a penalty for any of the previous months of 2014.

If you pay the penalty, you're not covered

It's important to remember that someone who pays the penalty doesn't have any health insurance coverage. They still will be responsible for 100% of the cost of their medical care.

After open enrollment ends on March 31, 2014, they won't be able to get health coverage through the Marketplace until the next annual enrollment period, unless they have a qualifying life event.

Minimum essential coverage

To avoid the fee you need insurance that qualifies as minimum essential coverage . If you're covered by any of the following in 2014, you're considered covered and don't have to pay a penalty:

  • Any Marketplace plan, or any individual insurance plan you already have
  • Any employer plan (including  COBRA), with or without “grandfathered” status. This includes retiree plans
  • Medicare
  • Medicaid
  • The Children's Health Insurance Program (CHIP)
  • TRICARE (for current service members and military retirees, their families, and survivors)
  • Veterans health care programs (including the Veterans Health Care Program, VA Civilian Health and Medical Program (CHAMPVA), and Spina Bifida Health Care Benefits Program)
  • Peace Corps Volunteer plans
  • Self-funded health coverage offered to students by universities for plan or policy years that begin on or before Dec. 31, 2014

Other plans may also qualify. Ask your health coverage provider.

What kinds of health insurance don't qualify as coverage?

Health plans that don't meet minimum essential coverage don't qualify as coverage in 2014. If you have only these types of coverage, you may have to pay the fee. Examples include:

  • coverage only for vision care or dental care
  • workers' compensation
  • coverage only for a specific disease or condition
  • plans that offer only discounts on medical services

Exemptions from the fee

Some people with limited incomes and other situations can get exemptions from the fee. Learn about  exemptions from paying the fee.