How To Comply With The Individual Mandate

The Affordable Care Act (also known as Obamacare) requires most Americans to have health insurance. This requirement is known as the individual mandate.

If you have health insurance, either through your job, your spouse’s job, Medicare or Medicaid, your coverage likely meets the requirement.

But if you don’t have any type of health insurance, you will need to purchase health insurance or pay a tax penalty to the government for the months you didn’t have coverage. For 2015 coverage, you will need to enroll in a health plan between Nov. 15, 2014, and Feb. 15, 2015. This time period is known as open enrollment.

Some individuals are exempt from the mandate, including those who do not make enough money to be required to file a tax return and certain American Indians and Alaska Natives.

Tax penalty
The annual tax penalty for not having qualifying coverage in 2015 is $325 per adult and $162.50 per child, or 2 percent of taxable income, whichever is greater.

Under the ACA, plans that are purchased on the federally facilitated Health Insurance Marketplace, also known as the exchange, may be available in four levels of coverage: Platinum, Gold, Silver and Bronze. The individual mandate tax penalty will be capped at the national bronze plan average.  In 2014, the bronze plan average was $12,240 for a family of five and $2,448 for a single individual.

The amount of tax penalties for not having qualifying insurance will continue to increase in future years.

During the 2015 tax season, the Internal Revenue Service will begin asking taxpayers to attest to having health insurance coverage when filing their 2014 income tax returns. Those who are unable to do so will be assessed the tax penalty. Likewise, during the 2016 tax season, you will be asked if you had health insurance coverage in 2015.

Avoiding the tax penalty
If you would like to purchase insurance from Blue Cross Blue Shield of North Dakota to avoid paying the individual mandate tax penalty, you can:

Not sure if you qualify for a federal tax credit to help pay for your insurance? You can use our handy tax credit calculator. If you qualify for the tax credit, you will need to purchase a plan on the Health Insurance Marketplace at healthcare.gov. Either way, you can start at www.BCBSND.com/shop.

Meet the deadline
Remember, you must purchase your 2015 health insurance before the current open enrollment period ends on Feb. 15, 2015. After that, BCBSND individual and family plans will not be available for purchase until the next open enrollment period begins on Nov. 15, 2016,unless you experience a qualifying life event. Typically you have 60 days from the time of the qualifying event to enroll in coverage. Some common examples of a qualifying event include:

  • Loss of affordable employer-sponsored coverage
  • Turning  age 26
  • Marriage/divorce
  • Birth or adoption
  • Moving to a new state

Denise Pinkney is an editor in the Communications department at Blue Cross Blue Shield of North Dakota.