Certified Public Accountant, New Jersey
Manny Forlenza CPA


Who has to have health insurance under the ACA? 
Most U.S. citizens, legal residents and their dependents are required to have affordable health insurance. Unless exempt, assume that coverage is required.

What happens if I don’t have health insurance? 
Starting in 2014, if you don’t have minimum essential coverage, or one of the accepted exemptions listed above, you will have to pay a penalty. The penalty starts out fairly low for 2014, but increases considerably in 2015 and again in 2016.

How much is the penalty? 
The annual penalty will be a set amount per individual (including dependents) or a percentage of your taxable income, whichever is greater. The annual penalty is capped at an amount roughly equal to the national average premium for a bronze-level qualified health plan. In other words, the penalty will be no more than it would have cost to buy insurance in the first place. The penalty is charged for each month you (and your dependents) don’t have minimum essential coverage, and will be figured on your tax return. You can be uninsured for up to three months without penalty.

If I don’t have insurance, when is my penalty due? 
The penalty is figured on your tax return and is due by the normal tax filing deadline, usually April 15.

How long can I be uninsured without penalty? 
You can be uninsured for up to three months without penalty.

What if I can’t afford health insurance? 
As listed above, exemptions are provided for those with low income. Also, being covered by Medicaid will count as being covered. In many states, Medicaid will expand to cover those under age 65 who have an income of up to 133% of the federal poverty level. Also, people in their 20s may have the option to buy a lower-cost "catastrophic" health plan. Finally, if your income is less than 400% of the federal poverty level, a premium assistance credit will be available to help you buy insurance.

What is "minimum essential coverage"? 
The Affordable Care Act requires health insurance plans to provide minimum services in 10 categories, called "essential health benefits." While nearly everyone must obtain minimum essential coverage, each state has some leeway in defining what those benefits are.

Where would I get insurance? 
Most people who have insurance at work will continue to be insured there. If your share of the premium for the insurance is more than 8% of your income, you’ll be able to shop for insurance in a Health Insurance Marketplace.

What’s the least amount of insurance I can buy? 
Each Marketplace will offer four plan levels. The lowest cost of these would be the bronze plan. Also available if you’re under 30 will be a "catastrophic" plan. Such plans must still provide minimum essential coverage, but will have a lower premium because of higher deductible and out-of-pocket costs than the other listed plans.

What is the premium assistance credit? 
The purpose of the credit (also known as a subsidy) is to help individuals with moderate income buy health insurance through a Marketplace. You must be enrolled in a health insurance plan through an Exchange to be considered for the credit.

Do I have to take the insurance my employer offers? 
No, you can join your spouse’s coverage, buy coverage through a Marketplace, or buy insurance on your own, directly from an insurance company or broker. But if you decline your employer’s coverage and are without coverage for yourself and your dependents, you will be subject to a penalty.

If you’re under 26, does being able to be covered by your parents' insurance disqualify you from the premium assistance credit? 
If you aren’t claimed as a dependent on your parents’ tax return, you wouldn't be considered part of the household. So as long as your income is within the guidelines, you may be eligible for the credit even if you have access to your parents' health insurance.