The individual shared responsibility provision, less formally known as the individual mandate, was the health insurance mandate imposed on individuals by the

Affordable Care Act The Affordable Care Act (ACA), formally known as the Patient Protection and Affordable Care Act and colloquially known as Obamacare, is a landmark U.S. federal statute enacted by the 111th United States Congress and signed into law by Pres ...

in the

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until tax year 2019. This individual mandate required most individuals and their families to have a certain minimal amount of health insurance, with certain exemptions. Otherwise, they were required to pay the individual shared responsibility payment as a fine. It was one of the many Affordable Care Act tax provisions. The federal tax penalty for violating the mandate was eliminated by the

Tax Cuts and Jobs Act of 2017 The Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018, , is a congressional revenue act of the United States originally introduced in Congress as the Tax Cuts and Jobs A ...

, starting in 2019. (In order to pass the Senate under reconciliation rules with only 50 votes, the requirement itself is still in effect).

Summary

Starting January 2014, individuals and their families must have at least minimum essential coverage. Individuals may be exempt from health insurance coverage in some cases: * The minimum amount that they must pay for annual premiums is more than eight percent of their household income. * They have a gap in coverage for less than three consecutive months. * They belong to a group explicitly exempted from participating. * They qualify for an exemption for one of several other reasons, such as a hardship that prevents them from obtaining coverage. Individuals and their families who have no health insurance, are required to make the shared responsibility payment.

History

The Patient Protection and Affordable Care Act signed in 2010 imposed a health insurance mandate to take effect in 2014. On June 28, 2012, the Supreme Court of the United States upheld the health insurance mandate as a valid tax, in the case of ''

National Federation of Independent Business v. Sebelius ''National Federation of Independent Business v. Sebelius'', 567 U.S. 519 (2012), was a List of landmark court decisions in the United States, landmark United States Supreme Court decision in which the Court upheld Congress's power to enact most ...

'' and thus within Congress' taxing power. The federal tax penalty for violating the mandate was zeroed out by the

, starting in 2019. (In order to pass the Senate under reconciliation rules with only 50 votes, the requirement itself is still in effect). This raised questions about whether the Affordable Care Act was still constitutional.

Minimum essential coverage

Whether health care coverage qualifies as minimum essential coverage depends largely on the type of coverage it is. Most coverage that people have is considered to be minimum essential coverage. However, coverage providing only limited benefits does not qualify as minimum essential coverage.

Coverage exemption

If individuals or anyone in their families claim an exemption from minimum essential coverage, individuals are not required to make a shared responsibility payment. If individuals have a gross income below the tax return filing threshold for a certain year, they are automatically exempt from the shared responsibility provision for that year. Most exemptions are claimed using Form 8965, ''Health Coverage Exemptions','' when a tax return is filed. However, certain exemptions must be granted by the health insurance marketplace in advance, like coverage exemptions for certain hardship situations and for members of certain religious sects.

Shared responsibility payment (eliminated as of tax year 2019)

Individuals without minimum essential coverage were required to make the shared responsibility payment until the end of tax year 2018, unless they qualified for exemptions. When the Tax Cuts and Jobs Act went into effect in 2018, it eliminated this tax penalty as of tax year 2019. The worksheets located in the instructions to Form 8965, ''Health Coverage Exemptions'', could be used to figure the shared responsibility payment amount that was due while still in effect. The annual payment amount was a percentage of the household income in excess of the return filing threshold or a flat dollar amount, whichever was greater.

References