The individual mandate of the Affordable Care Act has been upheld by the Supreme Court of the United States. Some love the idea and some hate it. Others still don’t know what an “individual mandate” is.
Let’s clear that one up: The individual mandate requires that every individual purchase health insurance or pay a penalty. Reform plans will give subsidies to Americans with middle incomes and below to help them afford a health insurance policy.
It’s not so cut and dry, however.
If you want to get technical (and who doesn’t when it comes to the wacky and wild world of health insurance):
Section 1411 of the Affordable Care Act exempts people who are members of “an exempt religious sect or division, as a member of a health care sharing ministry, as an Indian, or as an individual eligible for a hardship exemption, such information as the Secretary [of Health and Human Services] shall prescribe.”
Let’s break this down a bit. In addition to American Indians, the following groups of people are exempt from the health reform law:
People Living Below the Poverty Line
Americans with incomes below the federal poverty line do not have to pay taxes and they don’t have to purchase health insurance. Currently, the poverty line for a family of four is a total annual income of $23,050.
Members of Certain Faiths
If someone is a practitioner of a religious sect that has been in continuous existence since 1950 and is “conscientiously opposed” to accepting benefits from any public or private insurance, they are exempt. Amish people fall into this category, for instance.
Members of Health Care Sharing Ministries (HCSM)
These are nonprofit organizations where members share the same faith and similar lifestyles. HCSMs act as “clearinghouses” for members who have medical expenses and those who wish to share the burden of those medical expenses.
In addition to the groups listed above, folks with income restraints and certain other hardships will be exempt from the health care tax penalty. According to the Kaiser Family Foundation, tax penalty exemptions will be granted people for whom the lowest-cost plan option exceeds 8 percent of income and for those with incomes below the tax filing threshold.