Individual Shared Responsibility Provision

The individual shared responsibility provision is the official name of the individual mandate imposed by the Affordable Care Act in the United States. The mandate requires most individuals and their families to have a certain minimal amount of health insurance, with certain exemptions. Otherwise, they are required to pay the individual shared responsibility payment as a fine. The corresponding payment is the individual shared responsibility payment. It is one of the many Affordable Care Act tax provisions.

Starting January 2014, individuals and their families must have at least minimum essential coverage. Individuals may be exempt from health insurance coverage in some cases:

Individuals and their families who have no health insurance, are required to make the shared responsibility payment.

The Patient Protection and Affordable Care Act signed in 2010 imposed a health insurance mandate to take effect in 2014. On June 28, 2012, the Supreme Court of the United States upheld the health insurance mandate as a valid tax, in the case of National Federation of Independent Business v. Sebelius and thus within Congress' taxing power.

Whether health care coverage qualifies as minimum essential coverage depends largely on the type of coverage it is. Most coverage that people have is considered to be minimum essential coverage. However, coverage providing only limited benefits does not qualify as minimum essential coverage.

Essential Coverage?

If individuals or anyone in their families claim an exemption from minimum essential coverage, individuals are not required to make a shared responsibility payment. If individuals have a gross income below the tax return filing threshold for a certain year, they are automatically exempt from the shared responsibility provision for that year.

Most exemptions are claimed using Form 8965, Health Coverage Exemptions, when a tax return is filed. However, certain exemptions must be granted by the Health Insurance Marketplace in advance, like coverage exemptions for certain hardship situations and for members of certain religious sects.

Claimed on Tax Return, or either

Individuals without minimum essential coverage are required to make the shared responsibility payment, unless they qualify for exemptions. The worksheets located in the instructions to Form 8965, Health Coverage Exemptions, can be used to figure the shared responsibility payment amount that is due. The annual payment amount is a percentage of the household income in excess of the return filing threshold or a flat dollar amount, whichever is greater.

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