What is Obamacare?

Obamacare is the short name for the healthcare reform law formally known as The Patient Protection and Affordable Care Act. This legislation was signed by President Barack Obama on March 23, 2010, with the aim of reforming the U.S. healthcare system by:

- Helping more Americans access health care policies.

- Providing more health care benefits.

- Establishing the Health Insurance Marketplace, where Americans can purchase federal insurance with government subsidies.

Eligibility Conditions

To participate in this program, the Federal Government of the United States stipulates income levels based on family size and poverty guidelines. The income level to participate in Obamacare with the support of the Federal Government of the United States ranges from 100% to 400% of the poverty level based on family size. If the income level is 100% - 133%, the government will provide the most support, and the insurance purchaser will pay very low premiums. If the income level is below 100% or above 400% of the poverty level, the government will not provide support. The count of family members for ObamaCare includes spouses and unmarried children up to age 26. Individuals with families and those over 26 years old must purchase separate insurance.

Example: In 2013, the income levels to purchase ObamaCare insurance were as follows:

Mandatory Participants:

Obamacare is mandatory for all adults and children, including:

- U.S. citizens;

- U.S. permanent residents (Green Card holders);

- Individuals legally residing in the United States for 31 continuous days or 183 days in a 3-year period and received a tax notification from the IRS at the end of the year. This includes international students, individuals permitted to work in the U.S., tourists, those seeking medical treatment, or investors in the U.S. staying for 31 days or more who receive a tax filing notice may be required to purchase compulsory health insurance under the Obamacare program.

Exemptions or Non-mandatory Participants:

Moreover, the ObamaCare program also provides exemptions, making it non-mandatory for:

- Illegal residents in the U.S.;

- Individuals currently in prison;- Individuals or families that do not have to file income tax returns (those earning less than the minimum required to file and submit a tax return);

- Persons facing economic hardships, certified by the Health Insurance Marketplace

- HHS;- Those experiencing unexpected financial difficulties who cannot afford premiums for less than 3 consecutive months within 1 year after having purchased insurance;

- Individuals paying premiums higher than 8% of their household income;- Native Americans;- Members of certain religious organizations or health care sharing ministries.

Additionally, some individuals do not need to purchase ObamaCare insurance, such as:

- Those currently enrolled in Medicare, Medicaid for both adults and children;

- Persons having health insurance provided by their employer. However, these individuals can switch to ObamaCare insurance if they find it better. Those already holding any other type of health insurance provided by federal, state agencies, or private insurers.

Penalties for Non-participation in Obamacare

The IRS stipulates penalties for those eligible but failing to purchase mandatory insurance under the Obamacare program. The penalty will be deducted directly from the tax refund at year-end as follows:

- In 2014: $95 for each adult; $47.5 for each child per month without insurance; or 1% of the total household income, whichever is greater;

- In 2015: $325 for each adult; $162.5 for each child per month without insurance; or 2% of the total household income, whichever is greater;

- In 2016: $695 for each adult; $347.5 for each child per month without insurance; or 2.5% of the total household income, whichever is greater;

- In 2017: The penalty will increase based on the inflation rate or 2.5% of the total income.

Source: USIS

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