Penalty for failure to maintain health coverage will be phased in starting in 2014. The penalty will be reported and paid on the individual’s personal tax return.

Who must have insurance? All individuals are required to have a qualifying coverage except:

1. Individuals who qualify for certain religious exceptions

2. An individual who is not a U.S. citizen, U.S. national, or an alien lawfully present in the U.S.

3. An individual who is incarcerated

4. Certain individuals who cannot afford coverage (the required contribution is more the 8% of household income)

5. Individuals with income below the tax filing threshold

6. Individuals during a “short coverage gap”, which is a period of less than three calendar months.

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