The Affordable Care Act (ACA) requires most individuals to have minimum essential coverage for themselves and their dependents or otherwise pay a penalty. An individual is considered to have minimum essential coverage for any month in which he or she is enrolled in one of the following types of coverage for at least one day:
- Employer-sponsored coverage (including COBRA and retiree coverage)
- Coverage purchased in the individual market, including through the public Exchange
- A government plan such as Medicare, Medicaid, Children’s Health Insurance Program (CHIP), TRICARE or veterans coverage
- Student health coverage
- State high risk pool coverage
- Coverage for AmeriCorps volunteers.
Some individuals are exempt from the penalty, such as those whose required contribution towards the cost of coverage would be more than 8.13% of their household income and those who face other specific hardships.
For those without coverage and who do not meet one of the exemptions, the penalty for 2016 is calculated as the greater of two amounts:
- $695 per adult plus $347.50 per child, up to a maximum of $2,085 for the family, or
- 2.5% of family income in excess of the 2015 income tax filing thresholds ($10,300 for a single person and $20,600 for a family).
The Kaiser Family Foundation recently analyzed the projected penalty amounts for 2016. They found the average household penalty in 2016 will be $969 for those eligible to enroll in coverage through a public Exchange. This is an increase of 47% from the average estimated penalty of $661 for 2015.
For anyone looking to avoid this penalty in 2016, Keenan can help. As a leading health insurance broker, Keenan offers one-stop access to all major carriers and health insurance plans available in California, including those through Covered California as a Covered California Certified Insurance Agent.