Affordable Care Act
The patient Protection and Affordable Care Act was signed into law in March 2010.
- Coverage is guaranteed. No one can be denied or charged more for a pre-existing condition.
- Virtually all Americans are required to enroll in health insurance or pay a tax penalty.
- Federal tax credits are available to make health insurance more affordable.
- Virtually all consumers shopping for individual or family health coverage must enroll during a national open enrollment period.
Tax Credits and Cost- Sharing Reductions
Consumers who qualify can choose to receive advance payments of the tax credit to lower their premium costs each month or receive the entire credit with their annual tax refund. Eligibility is primarily determined by household income and household size.
- $11,490 to $45,960 for individuals
- $23,550 to $94,200 for a family of 4
Cost- Sharing Reductions
Consumers who qualify for a tax credit may also qualify for Cost-Sharing Reductions. Eligible consumers will be able to save on out-of-pocket costs such as deductibles, copayments and coinsurance.
About the Tax Penalty
Under the Affordable Care Act, virtually all Americans are required to purchase health insurance or pay a tax penalty. The penalty is sometimes referred to as the “individual mandate” or “individual responsibility payment.”
- In 2015, the penalty is 2% of income.
- In 2016, the penalty will increase to 2.5% of income.