Didn’t Have Health Insurance in 2018? You Might Pay a Penalty

No matter how healthy you are, health insurance is important. Without it, you may be just one major medical event away from wiping out your bank account and seriously changing your financial outlook. In 2014, when most of the ACA (Affordable Care Act) provisions took effect, virtually every U.S. citizen was required to have health insurance, either by purchasing a plan subsidized by their employer or purchasing an individual health insurance plan.

Understanding the Individual Mandate

Prior to the ACA, health insurance companies could keep their premiums affordable by declining coverage for applicants with pre-existing conditions. When the ACA took effect, insurers no longer had this option, and suddenly, thousands of people who had been ineligible for health insurance could sign up for a policy that would cover pre-existing conditions.

To ensure that the cost of health insurance didn’t go through the roof when the market was suddenly inundated with people who would cost insurers more money, the ACA required that everyone, including healthy people, purchase qualifying health insurance coverage to balance it out. This policy was enforced through the individual shared responsibility mandate.

Who Does the Individual Mandate Apply To?

The individual shared responsibility mandate, commonly referred to as a tax penalty, applied to U.S. citizens of all ages, including children. Anyone who claimed a child as a dependent on their federal tax return would be responsible for paying a tax penalty if that child didn’t have proper health insurance coverage.

There were a few exemptions available for people who met certain criteria. Members of certain religious sects that were opposed to accepting any health insurance benefits, including those issued by the state or federal government, could file for an exemption from the individual mandate, as could those whose projected income made purchasing health insurance impossible or those who were ineligible for Medicaid.

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What Happened to the Individual Mandate?

While the Affordable Care Act brought a lot of positive changes to the health insurance industry, the individual mandate was always among the most contentious parts of the bill. In late 2017, the Tax Cuts and Jobs Act eliminated the individual mandate penalty starting in 2019, stating that the government did not have the constitutional right to penalize citizens for not purchasing something.

While there is still technically a requirement on the books that every U.S. citizen, with a few exceptions, has health insurance, going forward, this policy is no longer enforceable through a tax penalty. It’s also important to note that the elimination of the penalty begins in 2019. Those who didn’t have health insurance in 2018 will still pay the penalty.

Do I Still Need Health Insurance?

Even though the tax penalty for not purchasing health insurance is gone, health insurance is still a necessity. Fortunately, there are plenty of coverage options available, including government subsidies for Las Vegas, Nevada, residents with tight budgets. Your Nevada Insurance Enrollment health insurance agent can help you find an affordable health insurance plan that provides you with coverage and protection for when the unexpected happens.

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