Category: Individual Healthcare Mandate
Health Care Reform and the Individual Healthcare Mandate
Starting in 2014, the Patient Protection and Affordable Care Act will implement an individual healthcare mandate, requiring virtually every American to purchase medical insurance. Those who don’t purchase the insurance will face a tax penalty at the end of the year.
But the individual healthcare mandate is just one of several mandates set forth in the comprehensive overhaul President Obama ushered in during 2010. Because of the sheer depth of the medical reform, many are confused about what exactly the individual healthcare mandate means.
Essentially, it means everyone is responsible for purchasing and maintaining the “minimum essential coverage” for basic health needs. Minimum essential coverage is defined as securing coverage either through a government-sponsored or employer-sponsored health insurance plan, a private health plan, or any other health benefit plans recognized by the Health and Human Services secretary.
The idea, in part, is that the overall cost of healthcare in the United States will decline if millions of Americans were not paying for the uninsured. Businesses are also required to offer health care insurance to their eligible employees or be subject to penalties. Businesses do, however, get tax write offs, maxing out at 50 percent of paid premiums for each employee.
Penalties start accruing in 2014 and gradually increase by 2016. For instance, in 2014 the tax penalty will be the higher of $95 per uninsured person for each household up to three people ($285) or 1 percent of taxable income. This will increase in 2015 to the higher of $325 per person (up to $975) or 2 percent of taxable income. And by 2016, the penalty will be $695 per person up to $2,085 or 2.5 percent of taxable income, whichever is greater.
Learn more about health care reform and how the PPACA will affect you and your family by reading below. Stay informed on the latest information by signing up for the HealthReform newsletter.
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The following is a brief (under 10 minutes) update prepared for Employees who are currently receiving the Federally mandated Exchange notices. Feel free to share.
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