Starting in 2019, the TCJA has eliminated the shared responsibility payment, more commonly known as the “individual mandate,” that penalizes individuals who are not covered by a health care plan that provides at least minimum essential coverage, as outlined in the Affordable Care Act of 2010 (ACA). Since this penalty is only eliminated starting in 2019, you still need to take account of it in making your health care decisions for 2018.
For individuals who do not have the required health coverage in 2018, the minimum annual penalty is $695 per adult and $347.50 for each child under 18. The maximum annual penalty can be substantially higher based on household income. The penalty applies for each month for which the required coverage is not in place, and is based on 1/12 of the annual penalty amount. Certain individuals may be exempt based on household income or other factors. (If you would like me to determine the penalty that would apply in your particular situation, or whether you qualify for an exemption, please give me a call.)
Please be sure to consider the application of the individual mandate in making your health care decisions for 2018. If you elect to forgo minimal essential health coverage, the money you save in premiums will be reduced by the applicable penalty. Starting in 2019, the individual mandate should no longer be a factor in your health care planning.
Please give us a call if you wish to discuss this issue.