Much has been made of the financial hammer that will fall on people who can afford to pay for health care under the Affordable Care Act but choose to forgo coverage.
Starting next year, individuals and their dependents are required to have minimum essential health insurance unless they qualify for an exemption. That's why you are hearing so much about the new health care exchanges, which will have open enrollment from Oct. 1 to March 31.
If you are deemed to be in the financial position to pay for coverage or you don't fall under an exemption, you'll have to pay a penalty for being uninsured, which you will have to fork over when you file your federal income tax return.
The penalty for being uninsured starts at $95 annually for an individual and can go up to $285 for a family, or 1 percent of a family's household income, depending on which is higher. The fee for children is half the adult amount and increases every year. By 2016 the penalty rises to $695 per adult, or 2.5 percent of household income, whichever is higher. The amount you may owe is based on the number of months in a given year you go without the required coverage. You won't have to pay if you are uninsured for less than three months of the year.
A fight over the requirement for coverage landed in the Supreme Court, which ruled that the penalty amounts to a tax. "The federal government does not have the power to order people to buy health insurance," Chief Justice John Roberts said in upholding the landmark law. But, he added, the government "does have the power to impose a tax on those without health insurance."
Since the penalty has been judged a tax, it means the Internal Revenue Service is supposed to have the sledgehammer to carry out the mandate.