The Individual Mandate for Health Insurance Coverage: In Brief

Summary

Since 2014, the Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended) has required most individuals to maintain health insurance coverage. Some individuals are exempt from this requirement. Those who are not exempt and who do not maintain coverage are subject to a penalty for noncompliance.

There are a number of different exemptions for which individuals may qualify. For example, individuals with certain religious beliefs and those whose household income is below the filing threshold for federal income taxes are not subject to the mandate and its associated penalty. Individuals can either apply for exemptions through the health insurance exchanges or claim exemptions when they file their federal tax returns.

Individuals who do not maintain minimum essential coverage and are not exempt from the mandate must pay a penalty for each month of noncompliance with the mandate. The penalty is the greater of a flat dollar amount or a percentage of applicable income. For 2016, the flat dollar amount is $695 and the percentage of income is 2.5%.

This report provides a brief overview of the individual mandate, its associated penalty, and the exemptions from the mandate.