The Affordable Care Act
The Affordable Care Act (ACA) of 2010 is a federal law that went into full effect in 2014. It’s made it easier and more affordable for many Americans to get health insurance. It also expanded the services and procedures that health plans need to cover. For many people, the ACA means that their health plan provides free preventive care, as well as many other important benefits. If you need to buy individual or family coverage, you can shop and compare plans through a centralized “Health Insurance Exchange.”
We’ve put together the basics that you need to know about how the law affects your coverage, your health plan options and your costs.
What Coverage Do I Need to Have?
Under the ACA, everyone must be enrolled in a health plan that offers “minimum essential coverage.” Health coverage provided by your employer, an individual plan that you buy and public insurance like Medicaid all may count as minimum essential coverage. If you can’t afford coverage, you may be eligible for financial help.
Is there a penalty for not having insurance?
When you are uninsured and cannot pay for healthcare services, others indirectly have to pay the bill. When more people—both sick and healthy—are enrolled in insurance, and pay their premium amount, there are more funds available to pay for healthcare when enrollees become sick. The ACA is intended to encourage as many people as possible to have coverage in order to spread the risk among a large group and minimize costs for everyone.
The ACA includes an “individual mandate” that requires most people to have qualifying health insurance. However, in 2017, Congress eliminated the ACA’s cash penalty associated with not having health insurance. Although individuals are still technically required to have health insurance, there are no longer any federal tax penalties for not having it. But if you’re uninsured, you’ll still have to pay all of your own medical costs.
Some states have enacted their own individual mandates, requiring residents to have qualifying health coverage or pay a fee with their state taxes. If you live in such a state and you don’t have coverage or an exemption, you’ll be charged a fee. This fee will be added to your state taxes, not your federal taxes.