What is the individual mandate?

The individual mandate is a law that requires individuals to maintain health insurance coverage or face a penalty. This law, which is authorized by the Affordable Care Act, is commonly referred to as the “individual mandate.” This mandate requires all individuals in Texas to obtain qualifying health insurance coverage starting in 2020 or face a penalty. For those that are not exempt from the mandate, they must have qualifying health insurance for each month of the year, or they will face the penalty. Qualifying coverage includes plans available through the Government Marketplace, employer-based plans, and individual plans enrolled through the Marketplace. Medicaid and CHIP are also accepted as qualifying coverage. Presently, the minimum coverage that must be obtained is the bronze level plans, which are designed to offer minimum coverage to individuals and families. The penalty for not having the minimum amount of coverage is based on a percentage of the individual’s income. For 2020, the penalty is 2.5% of the individual’s annual taxable income with a maximum penalty of the national average of the bronze level premium. This penalty will be assessed on individuals’ taxes for the year that they are not in compliance with the individual mandate requirement. Fortunately, individuals in Texas may be exempt from the individual mandate, such as those who have religious exemptions, those whose incomes are below the applicable filing threshold, those who are incarcerated, and those living outside of the United States. In addition, some individuals may be eligible for a hardship exemption due to certain financial hardships.

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