Individual Mandate


Requirement to Get Insured

Individual Shared Responsibility Tax


As one of the Affordable Care Act’s most significant provisions, the Individual Mandate encourages people to enroll in coverage, and stresses the importance of its availability. It requires most Americans to sign up for health insurance or otherwise pay a penalty tax.

There are certain individuals who may be exempt from the penalty and can remain uninsured. Under Obamacare, this requirement is effective beginning January 1, 2014.

To avoid the penalty, you must enroll in an individual health plan before March 31, 2014 if you’re currently uninsured.

Even if you already have health insurance, it may not be sufficient to avoid the penalty, which is why a number of individual policyholders had their plans cancelled. Short term policies, stand-alone benefits such as vision or dental, and some plans issued prior to 2014 may not make the cut. In order to avoid the penalty, you must have what the law considers minimum essential coverage.


Minimum Essential Coverage is defined as a health plan paying 60 percent or more of overall covered medical costs.

It can include:


The infographic below shows how you can determine whether or not you will be penalized for being uninsured under the law.



If you do not meet the requirements for the law by either not having adequate coverage or not being exempt, you will have to pay a penalty to the IRS when filing your federal income taxes. The penalties increase gradually each year to further emphasize the need to gain coverage.

The first year seems mild at the greater of $95 or 1 percent of income for adults, but for many, this tax will be unpleasant. Rising to $695 or 2.5 percent of income after the third year, plus an increase based on the cost of living, the penalty may cost more than coverage eventually for some families.

As subsidies are available to reduce premium rates and cost sharing on the state exchanges, coverage may look more appealing to the uninsured once the tax begins to rise.


Find a health plan that meets your needs and helps you avoid the Individual Shared Responsibility Tax, call an agent at 888 803 5917 or get a quote.