The penalty for not obtaining acceptable health insurance coverage is being phased in over a three-year period. The amount of the penalty is the greater of two amounts—the “flat dollar amount” and “percentage of income amount.”

For 2014, the penalty is $95 per person or 1 percent of income. For 2015, the penalty is $325 per person or 2 percent of income. In 2016 and after, the penalty is $695 per person or 2.5 percent of income.  “Income” for this purpose is your household income minus your exemption (or exemptions for a married couple) and standard deductions. Families will pay half the penalty amount for children.

The penalty is calculated on a monthly basis and will be assessed for each month that you go without coverage. If you have coverage for at least one day in a month, you are considered to be covered for that month. There is no penalty for a single lapse in coverage that lasts no longer than two months.

For example, you don’t have coverage from May 5 to Aug 15. Because you had coverage for at least one day for both May and Auguest, you are considered to be covered for those months and not covered for May and June. Assuming you had coverage the rest of the calendar year, you will not be subject to the penalty.

The hardship exemption is available through the Exchange if you face a hardship that prevents you from obtaining coverage. HHS has said that each of the following situations will always qualify as a hardship:

• If you turn down coverage because the Exchange projects that it will be unaffordable (even if your actual income for the year turns out to be higher, so that you are not eligible for the affordability exemption)
• If you are not required to file an income tax return but technically fall outside the exemption for those with household income below the filing threshold
• If you would be eligible for Medicaid under the expansion but live in a state that does not expand Medicaid eligibility
• If you face other unexpected personal or financial hardships, you may be eligible for a hardship exemption. This will be determined on a case-by-case basis.

Federal subsidies in the form of premium tax credits and cost-sharing reductions are available to low-income individuals who purchase health insurance through an Exchange. The Exchanges became operational Jan. 1, 2014.

To be eligible for a premium tax credit, you:

• Must generally have household income that is between 100 percent and 400 percent of the federal poverty line (FPL) for your family size
• May not be claimed as a tax dependent of another taxpayer
• Must file a joint return, if married
• Must enroll in one or more qualified health plans through an Exchange
• Cannot be eligible for minimum essential coverage (such as coverage under a government-sponsored program or an eligible employer-sponsored plan)
• The amount of the premium tax credit varies based on your household income.
• Some individuals who are enrolled in coverage through an Exchange may also be eligible for cost-sharing reductions to help them pay their medical expenses. Only those individuals with household incomes of up to 250 percent of the FPL are eligible.

Resource:  Individual Mandate ACA Flow Chart     and  https://www.healthcare.gov/fees/fee-for-not-being-covered/There are several premium subsidy calculators available online that you can use to predict your health care costs, including this one.

For more information on this topic, check out the Q&A basics that follow, or call the Millennium Medical Solutions Corp  at 855-667-4621.