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- Some groups may be exempt from having to have health insurance
- In order to qualify for the exemption, a group must be officially recognized as one that is opposed to the concept of having insurance. The Amish and the Mennonites are two groups that have been recognized as being exempt
- Everyone else must have health insurance or they are subject to a financial penalty. There are other exemptions that are not based on religion
Obamacare, officially known as the Affordable Care Act, calls for all Americans to have health insurance. If they are not, they are responsible for paying a penalty. However, there are certain exemptions to this rule. Most of the exemptions are related to financial hardship.
There is also a religious exemption, and the rules regarding this policy are quite strict. The Social Security Administration is the agency that determines whether you qualify for the religious exemption.
Most Amish and Mennonites are exempt from the health insurance mandate. People that practice most other religions are not exempt.
If you aren’t exempt from the individual mandate, find health insurance fast with free quotes using our search tool! Enter your zip code on this site to get started!
The Health Insurance Mandate
The Affordable Care Act (ACA) was enacted, in part, to help make health insurance more affordable for all Americans. One way to lower overall costs was to expand the coverage base.
A major aspect of the ACA is that all Americans who can afford to have insurance are required to do so.
If someone does not have health insurance, they must pay the highest of either:
- 2.5 percent of the annual household income (up to a maximum equivalent to the average price of a basic Marketplace plan)
- $695 per adult and $347.50 per child under 18 in a household (up to a maximum of $2,085)
When using the percentage method, you would only use the portion of your income that falls above the minimum required to file taxes. In 2016, that minimum threshold was $10,350 for individuals and $20,700 for married couples filing jointly.
This penalty is sometimes referred to as a fee, and it’s technically called the Individual Shared Responsibility Payment. It is due when you pay your taxes. People who are owed a tax refund will have their penalty taken out of their refund check.
Those who do not receive a refund will be asked to make their payments just like they pay their yearly taxes.
Minimum Essential Coverage
The ACA requires people to have a health insurance plan that provides minimum essential coverage. This type of coverage includes preventive care, hospitalization, emergency services, lab services, and other basic aspects of health care.
Most health insurance plans provide minimum essential coverage for individuals. Qualifying plans include:
- Most job-based plans
- Medicare, Medicaid, Tricare
- Children’s Health Insurance Program plans
- Marketplace plans
Plans that you purchase directly from an insurance company would likely provide you with the 10 essential Obamacare benefits. There are some supplementary plans that wouldn’t, though.
For this reason, and for the purpose of being smart with your money, you would want to spend time reviewing the details of each plan you’re considering purchasing.
Religious Exemptions to the Mandate
Some members of religious groups may not have to obtain health insurance nor would they be subject to the penalty. According to the IRS, you can be exempt if you fall under one of the following:
- You are part of a religious group which is recognized by the Social Security Administration as being conscientiously opposed to receiving insurance benefits.
- You are part of a recognized healthcare sharing ministry.
- You are a member of a federally recognized Indian tribe or can receive services from an Indian care provider.
Examples of Groups Eligible for Religious Exemptions
The Amish and the Mennonites are two groups that are exempt from the health insurance mandate. The two groups are also officially exempt from paying Social Security taxes. Additionally, they:
- Have waived their right to hospital insurance benefits associated with the Social Security Act
- Are recognized as being conscientiously opposed to insurance benefits, including those related to death, disability, retirement, and health care
- Are groups that provide food, shelter, and medical care to their own members
- Do not receive any benefits associated with Social Security
If you are a member of a group that has not yet filed an application for the exemption, you can apply using Form 4029. This form is found on the IRS website. Note that your group has to have been in existence since December 31, 1950, without interruption, and your group has to have made provisions for its dependents since that date.
You can also be exempt from the health insurance mandate if:
- Your income is below the level required to file a tax return.
- The time frame in which you didn’t have health insurance was less than three consecutive months in a calendar year.
- The amount of your premium would be more than a certain percentage of your household income.
- You don’t live in the US.
- You’ve suffered a hardship, such as being homeless, have dealt with a natural disaster, or have filed for bankruptcy.
The Individual Mandate and Exceptions
Most people in the US are required to have health insurance. To do so, they can sign up for a government program like Medicare or Medicaid, they can sign up through their employer, or they can purchase health insurance independently.
For those finding insurance on their own, they can either go through the Marketplace or can explore their options by getting information directly from insurance companies.
People who do not have health insurance may have to pay a penalty unless they meet the requirements for an exemption. The Amish and the Mennonites are exempt based on religious grounds, and others who are part of health care sharing ministries may also be exempt.
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