Obamacare Individual Mandate

ObamaCare imposes a new requirement on all U.S. citizens and legal residents to obtain government-approved health insurance. For most Americans this will mean they are required to either pay a portion of their income to private health insurance companies, or pay a fine to the federal government for not doing so.

Beginning in 2014, the federal government will impose a penalty for not insurance and legal residents who do not obtain government approved health insurance. Those without insurance will pay a tax that is the greater of a flat fee, or a percentage of family income. The flat fee will be phased in over several years. In 2014, the penalty will be $95 per adult in an uninsured household, increasing to $325 in 2015, then to $695 in 2016, after which it will increase annually in line with consumer inflation. For uninsured children, the fine will be half the amount applied to uninsured adults. If greater, households pay 1 percent of their income in 2014, 2 percent in 2015, and 2.5 percent in 2016 and thereafter in lieu of the flat per person fee.

Are there any exceptions for the individual mandate?

There is something called the hardship exemption. To be exempt from the insurance requirement, you would have to be facing insurance premiums at least equal to 8 percent of your income.