Understanding the Individual Shared Responsibility Provision

Health care reform has an impact on both employers and employees.  In fact, health care reform’s mandates reach all U.S. citizens, whether working or not. 

The Individual Shared Responsibility Provision of the Affordable Care Act requires U.S. citizens, and each member of their family, to 

• Have minimum essential coverage, or
• Have an exemption from the responsibility to have minimum essential coverage, or
• Make a shared responsibility payment upon filing a 2014 federal income tax return in 2015. 

All income tax return filers will report minimum essential coverage, report exemptions, or make individual shared responsibility payments on their tax returns.  U.S. citizens who are residents of a foreign country for an entire year and residents of U.S. territories are deemed to have minimum essential coverage. 

Exemptions from the requirement to have minimum essential coverage are available for people who 

• Have no affordable coverage options because the minimum amount paid is 9% or more of household income;
• Have a gap in coverage for less than three consecutive months; or
• Qualify for another exemption, such as a hardship exemption. 

To access the IRS publication to individuals on the Shared Responsibility Provision, click here.