On January 1, 2014, the Affordable Care Act's requirement that all individuals secure healthcare coverage will take effect. The November issue of Church Finance Today discussed tax credits available to churches that provide healthcare insurance coverage to their employees. (See "Health Insurance Credit May Benefit Many Churches," Church Finance Today, November 2013.) But what if your church doesn't provide healthcare coverage? In this article, I'll cover the essentials for church employees in search of their own medical insurance.
1. What are the Affordable Care Act's requirements regarding individual coverage?
Beginning in 2014, all individuals and families who can afford to purchase health insurance must do so. Those who choose not to purchase health insurance are subject to a government-imposed fee and in addition, are required to pay 100 percent of their healthcare costs. The government-imposed fee is known as the "individual shared responsibility payment."
In 2014, the fee for not purchasing health insurance is 1 percent of an individual's yearly income or $95 per person for the entire year, whichever amount is greater. Additionally, the 2014 fee for uninsured children is $47.50 per child, with a cap at $285. These fees are not stagnant; they increase each year. Moreover, they are not a substitute for paying healthcare expenses. Uninsured individuals must pay both 100 percent of their healthcare costs and the government-imposed fee.