As you may have heard, Congress repealed the Individual Mandate with their tax bill in December 2017. This means that, starting in 2019, people who do not enroll in “qualified” insurance under the Affordable Care Act will not have to pay a penalty with their 2019 taxes. The individual mandate is still in effect for 2018. If you do not have coverage in 2018, you will have to pay the penalty. For 2018, it is the greater of $695/adult and $347.50/child or 2.5% of household gross income. The maximum fee is $2,085 for 2018.
Qualified Affordable Care Act coverage includes employer-based coverage, ACA individual coverage purchased through the Marketplace or directly through an insurance carrier, and government coverage like Medicaid, Medicare, CHIP and Tricare. A full list can be found here: https://www.healthcare.gov/fees/plans-that-count-as-coverage/
For 2018, you can also go for a short period of time without qualified coverage. You will not be penalized for going without coverage for 2 months or less. Technically, you are considered covered as long as you have at least one day of qualified coverage in a month. For example, you could be covered for one day in May and zero days in June and July and still not be subject to the individual mandate penalty. Many clients get short-term insurance for short periods like this if they are between jobs. Contact us for more information on short-term plans.
In 2019, you will not have to pay a penalty if you do not have qualified coverage. This should open the market to more short-term plans and plans that do not cover all of the “essential benefits” now required to be included under qualified ACA plans (https://www.healthcare.gov/coverage/what-marketplace-plans-cover/)
You will want to make sure that any plan you purchase for 2019 includes the benefits that you need and want to have included in your plan. As these plans are brought to market, Kennon Insurance will study and vet their benefits. As of now, income-based tax credits and cost sharing reductions will still be available on the Marketplace. You will also still be able to purchase plans that cover all of the Essential Health Benefits. This is likely to continue to be our advice to most clients.
Again, the Individual Mandate penalty will be enforced for 2018. You will be assessed a tax penalty if you do not have qualified coverage for 2018.