User:Ethanbas/Individual shared responsibility provision

The individual shared responsibility provision (also called the individual shared responsibility payment) is the official name of the individual mandate imposed by the Patient Protection and Affordable Care Act.

Summary

Starting January 2014, an individual and his or her family must have at least minimum essential coverage. Individuals may be exempt from health insurance coverage if:

• The minimum amount they must pay for annual premiums is more than eight percent of their household income,
• They have a gap in coverage for less than three consecutive months,
• They belong to a group that is explicitly exempt from participating in the Affordable Care Act,
• They qualify for an exemption for one of several other reasons, such as a hardship that prevents them from obtaining coverage.

If an individual and his or her family don't have health insurance and don't qualify for any exemptions, they will be required to make the individual shared responsibility payment.

Note that if an individual lacked sufficient coverage for less than three consecutive months during the year, they are not required to make the individual shared responsibility payment.

History

The Patient Protection and Affordable Care Act signed in 2010 imposed a health insurance mandate to take effect in 2014 On June 28, 2012, the Supreme Court of the United States upheld the health insurance mandate as a valid tax, in the case of National Federation of Independent Business v. Sebelius and thus within Congress' taxing power.

Minimum essential coverage

Whether health care coverage qualifies as minimum essential coverage depends largely on the type of coverage it is. The majority of coverage people have is considered to be minimum essential coverage. However, coverage providing only limited benefits does not qualify as minimum essential coverage.

The following table is not comprehensive, but does mention some of the more common health care coverage situations, and whether or not they qualify as minimum essential coverage.

Coverage Type	Examples	Qualifies as Minimum Essential Coverage?
Employer-sponsored coverage	Group health insurance coverage for employees under a governmental plan, such as the Federal Employees Health Benefit program A self-insured group health plan for employees Retiree coverage	Yes
Individual health coverage	Health insurance purchased directly from an insurance company Health insurance purchased through the Health Insurance Marketplace Health insurance provided through a student health plan	Yes
Coverage under government-sponsored programs	Medicare Part A coverage Medicare Advantage plans Most Medicaid coverage Coverage through a Basic Health Program (BHP) standard health plan	Yes
Coverage that provides limited benefits	Coverage consisting solely of excepted benefits, such as stand-alone dental, vision, accident, or disability insurance Medicaid providing only a single service, for example, only providing family planning services Some TRICARE coverage	No

Coverage exemption

If an individual or anyone in his or her family claims an exemption from minimum essential coverage, the individual is not required to make a shared responsibility payment. If an individual's gross income is below the tax return filing threshold for a certain year, that individual is automatically exempt from the shared responsibility provision for that year.

Most exemptions are claimed using Form 8965, Health Coverage Exemptions, when filing a tax return. However, certain exemptions must be granted by the Health Insurance Marketplace in advance. This includes coverage exemptions for certain hardship situations and for members of certain religious sects.

The following table shows some types of exemptions available. It also indicates whether the exemption is granted by the marketplace, claimed on a tax return, or both.

Exemptions	Granted by Marketplace, Claimed on Tax Return, or either
Coverage is considered unaffordable	Tax Return
Income below the return filing threshold	Tax Return
Citizens living abroad	Tax Return
Nonresidents	Tax Return
Member of Indian Tribe	Either
Member of certain religious sects	Marketplace
General hardship	Marketplace
Resident of a state that did not expand Medicaid	Either

See also

• Form 1095

• Health insurance mandate

• Individual mandate

• Patient Protection and Affordable Care Act