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Avoid penalty by having minimum essential coverage

Avoid penalty by having minimum essential coverage

Posted Feb 05, 2015 by Author

Going without insurance is an Obamacare “don’t.”  And not just because comprehensive insurance coverage is designed to help pay for unexpected medical costs, and typically includes free preventive care. 

By having insurance that qualifies as minimum essential coverage, you can avoid a penalty which is assessed at tax time. That penalty is also known as the individual shared responsibility payment

For specifics on how the penalty is calculated, see “A fine for not having health insurance? Here’s the story.”

If you’re covered by the types of health plans listed below, you will not have to pay a penalty:

  • Any Marketplace plan, or any individual insurance plan you already have
  • Any employer plan (including COBRA plans, with or without “grandfathered” status
  • Retiree health plans
  • Medicare
  • Medicaid
  • The Children's Health Insurance Program (CHIP)
  • TRICARE (for current service members and military retirees, their families, and survivors)
  • Veterans health care programs (including the Veterans Health Care Program, VA Civilian Health and Medical Program (CHAMPVA), and Spina Bifida Health Care Benefits Program)
  • Peace Corps Volunteer plans
  • Self-funded health coverage offered to students by universities for plan or policy years that begin on or before Dec. 31, 2014

Other plans may qualify. Ask your health coverage provider.

Remember: Some coverage that provides limited services does not qualify as minimum essential coverage. If you have only this kind of coverage, you may have to pay the penalty. Examples include:

  • Coverage only for vision care or dental care
  • Workers' compensation
  • Coverage only for a specific disease or condition
  • Plans that offer only discounts on medical services
  • Short term medical plans

Not signed up with a plan qualifying as minimum essential coverage?

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This document is for general informational purposes only. While we have attempted to provide current and accurate information, this information is provided "as is" and we makes no representations or warranties regarding its accuracy or completeness. The information provided should not be construed as legal or tax advice or as a recommendation of any kind. External users should seek professional advice from their own attorneys and tax and benefit plan advisers with respect to their individual circumstances and needs.