How does the individual mandate affect me?
The individual mandate states that everyone will be required to maintain minimum essential coverage for themselves and their dependents starting January 1, 2014. Individuals who don’t have insurance coverage will have to pay a penalty.
The Patient Protection and Affordable Care Act includes two “play or pay” provisions: one for individuals and one for employers, both set to start in 2015. All individuals will have to be covered by health insurance or pay a fine. Help will be available for those who can’t afford coverage. The employer mandate requires employers with at least 50 employees to provide health care coverage for employees or face a penalty.
Whether you qualify for a subsidy depends on your income and whether you are offered coverage from your employer. You may be eligible for subsidy on the exchange if:
- You were not offered coverage by your employer, or
- The coverage offered was not affordable and your household income is no more than 400% of the federal poverty and the cost of coverage on the exchange would exceed a sliding scale of 2% to 9.5% of your household income
Coverage from an employer is considered not affordable if the employee’s share of that plan is more than 9.5% of the employee’s household income.
Individual health insurance is a type of plan that employees can purchase for themselves and their families in a manner similar to car insurance. Employees own their own policies and can take their policies with them even if they decide to leave the company. The employee pays for the policy, and the employer reimburses them for the premium or a portion of the premium.
Group health insurance coverage is a type of health plan that is purchased by an employer and is offered to eligible employees and eligible dependents. The employer selects a health plan for employees, purchases the plan, and requires that employees pay a share of the premium. Under group health insurance, there is a minimum percentage rate that the employer must contribute. The employer owns the policy, and employees will have only limited coverage when they end up leaving the company.