Does the Health-Care Reform Law Apply to You?

June 28, 2013



Are you exempt from the health insurance mandate?

Most U.S. citizens and legal residents are required to have health insurance beginning in January 2014 or face a penalty tax that can be as high as 1% of taxable household income exceeding the taxpayer's federal income tax filing threshold (increasing to 2% in 2015, and 2.5% in 2016). You can avoid the penalty tax if you already have health insurance for the entire year, and the coverage is obtained from one of the following:


  • Medicaid or the Children's Health Insurance Program (CHIP)
  • TRICARE (for service members, their families, and retirees)
  • The veteran's health program
  • Employer-provided health coverage
  • A policy you purchase on your own that's at least at the Bronze level
  • A plan that is grandfathered (in existence prior to the enactment of the ACA that meets the requirements of grandfathered plans under the law)

However, certain groups are not required to be insured and thus are not subject to the penalty tax. The ACA specifically excludes people who are members of an exempt religious sect or division, members of a health-care sharing ministry, Native Americans, undocumented immigrants, incarcerated individuals, people whose income is so low that they don't have to file federal income taxes, and people eligible for a hardship exemption (when the cost of insurance after employer contributions and federal subsidies exceeds 8% of their income).

What types of insurance are not affected by the health-care reform law?

The health-care reform law does not apply to automobile insurance, homeowners insurance, and umbrella liability coverage, even though they provide some health-related coverage. Also not subject to the law's provisions are life, accident, disability, long-term care, and workers' compensation insurance. Medigap (Medicare supplement) insurance is generally not covered by the ACA if it's sold as a separate plan and not as part of a comprehensive health insurance policy. In addition, retiree-only plans are exempt from the ACA's provisions. These plans are group health insurance plans with fewer than two participants who are current employees.

For more consumer information about enrolling in a health insurance plan, government subsidies, and tax credits, visit the U.S. government's website,


Compass Financial Group, LLC. Is a registered investment advisory firm located in Dublin, Ohio. We take the time to get to know you and specifically identify what it is that you and your family value most. With this knowledge, we then work with you to develop a custom approach and position your financial model so that you are situated with the best possible opportunity to achieve your dreams.