As you may have heard, the new year arrived with a big change to the Affordable Care Act (ACA):
The individual mandate will not be enforced in 2019.
On Jan. 1, the tax penalty for going without minimum essential coverage was repealed.
In December 2017, President Trump signed into law a tax bill eliminating the tax penalty for individuals without insurance.1 The repeal of the individual mandate penalty is effective for the 2019 coverage year. You will no longer be penalized at the federal level if you don’t have health insurance that’s considered minimum essential coverage (e.g., major medical insurance).
What does the tax penalty repeal mean for you?
Here are some quick answers to your individual mandate and tax penalty-related questions about health insurance this year and in future.
Has the ACA been repealed?
As such, premium tax credits continue to be available to those who qualify based on income, and the ACA’s other provisions still apply (for example, coverage is guaranteed regardless of health history and you can’t be charged more due to health status).3
Was the individual mandate repealed?
No. The individual mandate technically remains in effect.4
It is important to note that the ACA’s individual shared responsibility provision (the mandate that you purchase health insurance) and the individual shared responsibility payment (the tax penalty you owe for failing to purchase health insurance) are two different things.
The provision was not repealed, the payment was repealed.
In plain language, that means that even though the mandate is technically still in effect, there will be no federal tax penalty if you don’t comply starting with the 2019 coverage year.
The repeal didn’t take effect right away, and it is not retroactive. That means you could owe the payment when you file your taxes in 2019 if you did not have minimum essential coverage in 2018.
If the individual mandate isn’t enforced, will I need health insurance in 2019?
Only you can decide whether or not to enroll in a major medical insurance plan for 2019. Major medical plans qualify as minimum essential coverage under the Affordable Care Act. That means they satisfy specific requirements such as being guaranteed issue, not costing more based on health history, and including no-cost preventive services and 10 essential health benefits.
You may have health-, life- or budget-related reasons for exploring alternative coverage options such as short-term health insurance.
These policies are available year-round, do not adhere to ACA standards, are not minimum essential coverage, are not guaranteed issue and will not cover pre-existing conditions.
Begin Coverage in 3 Easy Steps!
You don’t have to go it alone. If you need help determining which coverage to buy, talk with a licensed health insurance producer.
You can also call 866-278-1464 to speak to a health insurance agent from HealtheDeals.com.
When does the tax repeal take effect?
It took effect January 1, 2019.5 The federal penalty still applies to the 2018 tax year. If you didn’t have minimum essential coverage and were not exempt in 2018, you could owe the federal penalty when you file your 2018 taxes in 2019.
If you go without minimum essential coverage in 2019, you will not owe a federal penalty when you file your 2019 taxes in 2020. However, a state penalty could still apply.
Summary + next steps
The repeal of the ACA tax penalty in 2019 means you will not be financially penalized in most states for going without minimum essential coverage.
Major medical insurance remains your best bet if you want the most comprehensive health benefits available and coverage that adheres to all ACA requirements.
If you want to explore alternative coverage options for 2019, then you can do so without owing a federal tax penalty.6
Learn more about alternative health insurance.
Are you in between jobs? Short-term medical insurance is a low-cost alternative health insurance option to help out in case an unexpected illness or injury lands you in the hospital while you’re without major medical.
It’s free and just takes a minute to generate quotes for multiple policies. Then you can compare coverage options and apply.
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The materials available at this web site are for informational purposes only and not for the purpose of providing legal or tax advice. You should contact your attorney or tax professional to obtain advice with respect to any particular issue or problem.