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Beginning in 2014, the Affordable Care Act (ACA) requires most individuals to obtain acceptable health insurance coverage for themselves and their family members or pay a penalty. Because this provision has the effect of “requiring” individuals to have coverage, it is often referred to as the “individual mandate.” Individuals may be eligible for an exemption from the penalty incertain circumstances.

On Jan. 30, 2013, the Departments of Health and Human Services (HHS) and the Treasury issued two proposed rules relating to the individual mandate. These rules outline exemptions from the individual mandate, explain how the penalty will becomputed and establish standards and procedures for designating certain coverage as constituting “minimum essential coverage.”

Effective Jan. 1, 2014, the Affordable Care Act (ACA) imposes a penalty on large employers that do not offer minimum essential coverage to “substantially all” full-time employees and dependents. Large employers that do offer coverage may still be liable for a penalty if the coverage is unaffordable or does not provide minimum value.