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Tuesday, October 08, 2013 3:08:18 PM

Do I have to buy health insurance because of Obamacare?

Starting in 2014, according to the Affordable Care Act (also known as Obamacare), the vast majority of American citizens will be required to have health insurance or pay a penalty. This rule is called the individual mandate.

Here are the penalties for noncompliance:

  • For 2014: $95 per adult and $47.50 per child (up to $285 for a family) or 1% of family income*, whichever is greater.
  • For 2015: $325 per adult and $162.50 per child (up to $975 for a family) or 2% of family income*, whichever is greater.
  • For 2016: $695 per adult and $347.50 per child (up to $2,085 for a family) or 2.5% of family income*, whichever is greater.

*Income is defined as total income in excess of the filing threshold, which is $10,000 for an individual and $20,000 for a family in 2013.

However, a penalty won't be assessed on individuals who:

  • Can't afford coverage based on formulas contained in the law*
  • Have income below the federal income tax filing threshold
  • Are members of Indian tribes
  • Were uninsured for short coverage gaps of less than three months per year
  • Have received a hardship waiver 
  • Live outside of the United States
  • Have a religious exemption.
*An employer-sponsored plan is considered unaffordable if your cost for self-only coverage exceeds 9.5 percent of your income.
To find out if you're eligible for a subsidy that reduces the cost of health insurance, use our Obamacare Eligibility Calculator. You can shop and compare plans approved by the Affordable Care Act, no matter where you live.

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Our Insurance Expert

Laura Adams is a personal finance expert, award-winning author, and consumer advocate. As Senior Insurance Analyst, she represents insuranceQuotes in the media and works to make sure consumers protect their financial futures by having the right kinds of insurance.

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