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The Affordable Care Act, also known as Obamacare, requires that individuals buy health insurance. If you don't want to buy insurance, you will have to pay a penalty – unless you qualify for an exemption from the mandate.


Information cards are stacked on a table during an Affordable Care Act outreach event for the Latino community in Los Angeles on Sept. 28, 2013. People without health insurance, who are required to get it under the Obamacare law, could begin shopping for a health plan online on the new government-run 'exchanges' as of Oct. 1.

Jonathan Alcorn/ Reuters/ File

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The insurance "exchanges" set up under the Affordable Care Act, where people can shop online for health insurance, went live on Oct. 1, and an estimated 48 million uninsured Americans can use them to try to find an affordable plan. The 2010 Obamacare law requires that people have health insurance, or that they pay a fee starting next year if they choose to opt out.  

Here are the ins and outs of forgoing health insurance. 

If you don't have health insurance, and aren't sure if you want to purchase a plan, how long do you have to decide?


How much are the penalties for not buying a health plan?



What kind of insurance policy prevents someone from having to pay the penalty?

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In short, any plan that qualifies as "minimum essential coverage." This includes plans offered on the marketplace exchange, a plan provided by your employer, Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), TRICARE, Veterans Healthcare programs, Peace Corps Volunteer plans, and possibly others. For a full list with more details, refer to   

What plans don’t qualify?

You'd have to pay the fee if you have only vision or dental coverage or only workers' compensation, coverage only for specific health conditions, or a plan that offers only discounts on medical services.

Would it be cheaper to buy an insurance plan, and elect to not use it, rather than pay the fee?


Why is there a penalty?

The penalty is meant to offset the costs of urgent medical care for individuals who do not have health insurance, according to The website also warns that people without health coverage will have to pay the entire costs of all their medical care.

How does someone apply for an exemption from health insurance so that they don't have to pay the penalty?

You can claim exemptions on your 2014 federal tax return, or you can apply for exemptions on the Health Insurance Marketplace exchanges. (The application is not currently available). will provide up-to-date information about how to apply for an exemption

Who is eligible for such exemptions?

You can be exempted from the requirement to buy health insurance – and hence, from the penalty – if you meet one of the following requirements:


•You live illegally in the United States.

•You’re incarcerated, and not awaiting disposition.

•You’re a member of a recognized Indian tribe.

•Your income is officially deemed too low.

•The lowest-priced converge would cost more than 8 percent of your household income.


•You’re a member of a recognized health-sharing ministry. (Note: Christian Scientists do not currently qualify for the exemption.) also provides a list of hardship exemptions that qualify an individual for exemption.

This flow chart from the Kaiser Family Foundation might help you determine if you need to buy health insurance.  

Massachusetts has granted a religious exemption to its requirement to buy health insurance. Is this exemption still valid?  

No. The new federal requirement overrides state provisions, which means that any exemptions not listed under the Affordable Care Act are not included. 

If you are not exempt, how will the penalty be assessed?


Other articles in the Monitor's Obamacare 101 series:

What happens starting Oct. 1?

What to know if you already have health insurance

How the federal subsidy works

What owners of small businesses need to know

• When will the enrollment glitches be fixed?

What college students need to know

Seven ways you can sign up, despite Web woes

Enroll by March 31 to avoid penalty, White House clarifies


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