Individual Health Insurance Mandate

Effective in 2014, the Affordable Care Act (ACA) implements an individual health insurance mandate. Under the mandate, most Americans without employee-sponsored coverage are required to purchase their own health insurance policies. Failure to do so may result in a tax penalty.

How much is the penalty?

In 2014: $95 per adult and $47.50 per child under 18 (up to $285 for a family) or 1 percent of family income, whichever is greater.

In 2015: $325 per adult and $162.50 per child under 18 (up to $975 for a family) or 2 percent of family income, whichever is greater.

In 2016 & There After: $695 per adult and $347.50 per child under 18 (up to $2,085 for a family) or 2.5 percent of family income, whichever is greater.

Is anyone exempt from having to purchase health insurance?

Certain people are completely exempt from the law and do not have purchase health insurance:

  • 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.
  • 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 (HCSMs)
    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.

What if I have a lapse in coverage?

If you experience a single gap in coverage of less than 3 months, you are not subject to the tax penalty.


For more helpful information about health reform, visit the following pages:

Health Insurance Exchanges
Age Rating
Guaranteed Issue