Is The Individual Mandate Still In Effect? 2019 Will Bring Changes
Updated: March 12, 2018
It's been 8 years since Obamacare, also known as the Affordable Care Act, passed and nearly 4 years since it took effect. When the Affordable Care Act passed, it brought something known as an individual mandate with it. This mandate, also known as the individual responsibility payment, requires that every American have health insurance coverage, or else face hefty fines from the IRS.
This mandate caused a backlash of protest, particularly among younger people, many of whom think they don't need health insurance. When they realized that their forced participation was partially due to a need to fund subsidy payments for older Americans, they became even more incensed. Many refused to pay or participate in any way.
The Individual Mandate is Still in Effect
Yes, as of right now, the individual mandate is still in effect. However, 2018 will be the last year the individual mandate is federally mandated. Starting in 2019, you will no longer be required to purchase health insurance under federal law because of the Tax Cuts and Jobs Act of 2017.
On December 22, 2017, President Donald Trump signed the Tax Cuts and Jobs Act of 2017 into law. This bill aimed to lower taxes across the board, and promote job growth in the US, while at the same time attempting to undermine the Affordable Care Act by dismantling the vital piece of legislation that makes it work, the individual mandate. While the bill was signed into effect in 2017, the individual mandate will remain in effect during 2018, and starting 2019, you will no longer have to buy health insurance at the federal level. However, there are certain states that will be looking to create their own individual mandates or similar regulations to keep their state exchanges and marketplaces running.
Why the Individual Mandate?
The penalty or mandate is designed to encourage all Americans to buy insurance as this is intended to ensure greater coverage of adults and children in the United States while reducing insurance premiums for everyone. In general, healthy young adults tend to view themselves as invincible and believe they do not need insurance. A lack of healthy young adults in the marketplace raises costs for people who are older or have chronic health conditions.
The GOP Attempts to Eliminate the Mandate?
The mandate is the least popular aspect of the ACA. Critics, including the GOP and the Trump Administration, say it is coercive and forces all Americans into the same risk pool, increasing health insurance premiums for healthy adults. Republicans are seeking to eliminate the mandate and President Trump signed an executive order the day he took office to make it easier for agencies to not enforce this mandate, although none have yet taken action.
The executive order, signed on January 20, 2017, was intended to "minimize the unwarranted economic and regulatory burdens" of the Affordable Care Act until the law could be repealed and replaced. The order directed the Department of Health and Human Services and other agencies to delay, waive, or give exemptions from the ACA requirements that would impose a financial burden on consumers, but no specific guidance was provided and the order did not change existing regulations.
President Trump decided to flex his power once again with an executive order that has been deemed Obamacare Relief. Signed on October 12, President Trump effectively aimed to dismantle Obamacare which has been in effect since 2014.
This executive order would essentially eliminate the individual mandate, bring back association health plans (which would benefit small businesses), eliminate federal regulations for health insurance plans, and most importantly it would reduce or eliminate health insurance subsidies provided through the health insurance marketplace.
It wasn't until December 22, 2017, that the GOP and President Trump were successfully able to eliminate the individual mandate with the Tax Cuts and Jobs Act of 2017. After months of failed attempts, President Trump was finally able to make good on his campaign promise. While it's not a full repeal and replaces of Obamacare, the Tax Cuts and Jobs Act of 2017 began the process of dismantling the Affordable Care Act.
Can You Avoid Paying the Mandate?
Yes, of course. As stated earlier, if you and your family have qualifying health coverage, then you don't have to worry about the individual mandate come tax season. If you are wondering if you can avoid paying the individual mandate if you don't have a qualifying health plan, or just simply don't have coverage, then the answer is still yes. However, you will have to file for an exemption come tax season.
How to Avoid Paying the Mandate
You can qualify for an exemption from the mandate in some cases. There are a variety of exemptions, including group membership, financial status, and some life events. You can visit healthcare.gov to find out if you qualify for an exemption.
Compare Health Insurance Quotes to Save Money
If you do not qualify for an exemption from the mandate, it's important to buy health insurance coverage for yourself and dependents. Buying health insurance not only saves you from the individual mandate penalty but also ensures your family has the coverage they need in the event someone gets sick or hurt.
There are plenty of free tools available online that make searching for affordable health insurance easy. At First Quote Health, all you have to do is enter your zip code to speak to an experienced agent and compare all the best health insurance quotes.