About the ACA

The Affordable Care Act (ACA) affected just about everyone in America when it was signed. Now, all individuals who are able to afford it must obtain at least the Minimum Essential Coverage (MEC) of health insurance, either from the Marketplace, an insurance provider, or from your employer.

Individual Shared Responsibility

Like Applicable Large Employers (ALEs), individuals in America must meet certain provisions under the ACA. These provisions are part of the Individual Shared Responsibility, and if they’re not met you could be liable for making an individual shared responsibility payment. The main provision to remember is that you and each of the members of your family are required to either:

  • Have insurance that meets the MEC
  • Qualify for an exemption from coverage
  • Make a payment for the months you were uninsured without an exemption.

You’re also required to report your coverage to the IRS, and claim or report your exemption or make a payment, under the Individual Shared Responsibility.

Where to Find Healthcare Coverage

When seeking out health insurance coverage for you and your family, you’ll need to make sure it meets the MEC and Minimum Value (MV) required by the ACA. Most insurance providers will be able to help you select a plan that keeps you compliant and in your budget. You can typically find MEC, qualifying plans:

  • Through an online Health Insurance Marketplace for your area,
  • Under a government-sponsored program like Medicare, Medicaid, and the VA, or
  • Through a qualified insurance provider recognized by the Department of Health & Human Services.

Employer Provided Coverage

If your employer has 50 or more full-time employees, they’re considered an ALE and must make an offer of coverage to their full-time employees. This is another way you can get health insurance and still be compliant with the ACA. The coverage ALEs are required to offer must meet MEC and MV, otherwise they face penalties. You can choose to accept the coverage offered to you through your employer, or search for other options from the places listed above, or both. Keep in mind that your employer may face penalties if you seek additional individual coverage and find you’re eligible for an exemption, because this means their coverage didn’t meet ACA requirements.

Individual/Employee Penalties

If you’re required to get health insurance but don’t, then you may have to pay a penalty at tax time following the year you went without. This penalty is calculated based on your household income or as a per person fine, whichever is higher. The penalty for 2015 is either 2% of your income or $325/uninsured adult, $161.94/uninsured child, and will increase to adjust for inflation each year.

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