Individual Coverage

The Affordable Care Act guarantees that, beginning in 2014, health insurance companies cannot deny health insurance coverage to an individual based on a pre-existing condition. They must give coverage to anyone who applies, and it cannot cost more if you are sick. The cost of health insurance premiums cannot vary based on health status for anyone. Premiums can vary only based on age, geography, family size and tobacco use. The law also restricts how much premiums can vary based on age.

Starting in 2014, the Patient Protection and Affordable Care Act requires you to have minimum essential health insurance for each month of 2014 or possibly be subject to a penalty.

The following types of insurance provide minimum essential coverage:

  • Employer-sponsored coverage (including COBRA coverage and retiree coverage)
  • Coverage purchased in the individual market
  • Medicare Part A coverage and Medicare Advantage
  • Most Medicaid coverage
  • Children’s Health Insurance Program (CHIP) coverage
  • Certain types of veterans health coverage administered by the Veterans Administration
  • Coverage provided to Peace Corps volunteers
  • Coverage under the Nonappropriated Fund Health Benefit Program

If you have one of these types of health insurance, you are not required to purchase different health insurance.

Certain types of insurance do not qualify as minimum essential coverage, such as vision or dental care only, worker’s compensation, coverage for specific diseases or conditions, or discount plans.

If you don’t have one of these types of health insurance, you may pay penalties of up to 1% of your yearly income or $95 per person for the year, whichever is higher. The penalty for an uninsured dependent under the age of 18 is $47.50 per child – up to $285 total. These penalty amounts increase over the next few years.


If you don’t have minimum essential health coverage for all 12 months of 2014, you can qualify for an exception to paying a penalty if one or more of the following are true:


  •  You are a member of a religious sect recognized as conscientiously opposed to accepting insurance benefits.
  • You are a member of a recognized health care sharing ministry.
  • You are a member of a federally recognized Indian tribe.
  • You are not required to file a tax return because you have very low income.
  • You were without coverage for less than three consecutive months during the year.
  • You suffered a hardship that, as certified by the Health Insurance Marketplace, makes you unable to obtain coverage.
  • You can’t afford coverage because the minimum amount you must pay for the premiums is more than 8% of your household income.
  • You are in a jail, prison, or similar institution.
  • You are not a U.S. citizen, a U.S. national or an alien lawfully present in the U.S.