On March 23, 2010, the Patient Protection and Affordable Care Act was signed into law. Better known as Obamacare, and with roots in the Reagan Administration, the law requires health insurance companies to accept applicants without regard to previously existing conditions. Furthermore, it makes having health insurance a requirement under the law and provides potential penalties for those who do not have coverage.
The idea is to make sure that as many people as possible have health insurance by mandating that those who can afford health insurance carry it. The law does not apply to those who live below poverty level, or if the cost of health insurance would be more than 8 percent of your monthly income. In those instances, you may be eligible for Medicaid in lieu of having a different health insurance policy. But if you are outside of those parameters and fail to purchase health insurance, you can be fined.
The fine for not having health insurance will not begin to be levied until 2016. If the cost of the required insurance coverage is less than 8% of your income and you live above the poverty level, you can be charged $695 each year, or up to 2.5% of your annual income. Insurance will be reported on your annual income tax forms, and the Treasury Department will be authorized to charge the fines through your IRS account.
In the meantime, health insurance companies have compliance deadlines to allow more people access to health plans, and those plans must be in place by 2014. You still have 2 years before Obamacare requires you to have health insurance, and coverage options are already increasing. Rather than wait on the law to force you to have health insurance, shop for health insurance coverage under the new regulations and pick up the insurance you need before you need to have it.