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Health Care Reform:

Health Insurance & Affordable Care Act

FAQ: How Will The Individual Mandate Work?

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Although the law takes effect Jan. 1, the initial enrollment period continues through March 31. Since people are exempted for a short coverage gap – less than three months – individuals that obtain coverage before the end of March will be exempt from the payment for that period.

Q. How do I report my coverage or exemptions to the government?

A. You will not have to report your coverage or exemptions until you file your 2014 income tax return, which won't be due until April 15, 2015. Insurance providers will also be required to help their clients report their health coverage. The Internal Revenue Service says it will put out details later about how the reporting will work.

If your income is so low that you do not file a tax return, you are exempt from paying the penalty.

Q. What happens if I don't get coverage?

A. If you do not have the minimum level of coverage and do not qualify for an exemption, you must pay a penalty to the IRS at the end of the tax year. The penalty for the first year is up to $95 per adult and $47.50 per child, or 1 percent of family income, whichever is greater.

The fine, however, increases over time and in 2016 will be as much as $695 per adult and $347 per child (up to $2,085 for a family) or 2.5 percent of family income, whichever is greater.

The amount you owe will be pro-rated to reflect the number of months you were without coverage.

CBO estimates that 6 million people, about 2 percent of the population, will be assessed a penalty in 2016.

Q. How do I apply for an exemption?

If you are seeking an exemption for incarceration, membership in an Indian tribe or health care sharing ministry, you can apply through the health insurance exchanges or make a claim when you file taxes, according to a final rule issued by the U.S. Department of Health and Human Services. If you are claiming economic hardship or a religious exemption, you must get an exemption certificate from the online insurance exchange. If you are claiming that coverage is unaffordable, you are in the United States without proper documentation or have a coverage gap of less than three months, you can make the claim when you file your 2014 taxes in 2015.

Q. What were the issues in the Supreme Court challenge?

A. Opponents of the law argued that forcing individuals to buy insurance was unprecedented and could lead to much greater federal intrusions against individual freedoms. Supreme Court Justice Antonin Scalia, in fact, asked during the arguments on the law if such a provision meant the government could force Americans to buy broccoli. Supporters countered that the mandate was part of a long tradition of Congress regulating business trade under the Commerce Clause of the Constitution. In the suit brought by 26 states, the Supreme Court allowed the mandate to stand because a majority of justices, in an opinion written by Chief Justice John Roberts, said it was a tax and Congress has the power to impose taxes.

Fri, Aug 30 2013

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