Paying for Coverage

Starting January 1, 2014, most Americans will need to have health care coverage. This is part of the individual mandate, the requirement by the government that individuals maintain health insurance.

The good news is, if you qualify, the government may help you pay part of the bill for your health plan when you buy coverage through the public Health Insurance Marketplace. This help is called a subsidy.

Starting on October 1, 2013, you can buy coverage from the Health Insurance Marketplace, with an effective date of January 1, 2014. You can also find out if you can get help to pay for your costs. Depending on your income, you may qualify for premium subsidies or tax credits to help pay for your plan.

Who qualifies for help:

Your eligibility for tax credits or subsidies depends on your income, age and the number of people in your family. People at the lower end of the income scale get the most help. Those who receive health insurance through their employer, Medicare or Medicaid are generally not eligible to receive tax credits or subsidies.

If you get adequate health insurance through your job or Medicare, nothing really changes for you.

You must be covered or pay a penalty:

The Affordable Care Act requires most individuals to get health care coverage. With few exceptions, most people who remain uninsured in 2014 for longer than three months will pay a penalty, which will be taken out of their income tax refund checks. The penalties include:

For the Year Tax Penalty Amount
2014 $95 or 1 percent of income, whichever is greater.
2015 $325 or up to 2 percent of income, whichever is greater.
2016 $625 or up to 2.5 percent of income, whichever is greater.