ACA Individual Mandate: Understanding the Implications and Exemptions

The Affordable Care Act (ACA) introduced a requirement, known as the individual mandate, for individuals to maintain health insurance coverage. This mandate was intended to mitigate the issue of people waiting to get insurance until they needed it, leaving them exposed to high medical expenses and putting a strain on the healthcare system.

Understanding the Exemption for Low-Income Individuals

The ACA recognizes that individuals below the federal poverty level may face financial challenges in obtaining health insurance. As such, it offers an exemption from the individual mandate for individuals who earn below the federal poverty level. This exemption exempts individuals from paying any penalties for not having health insurance.

Employer Reporting of 1099 Income

The Internal Revenue Service (IRS) requires employers to report all payments made to contractors and self-employed individuals on Form 1099. This reporting threshold is currently set at $400. Even if your income falls below the minimum filing requirement, you are still required to report your income to the IRS.

Retroactive Penalties and Trump’s Executive Order

The ACA penalties for not having health insurance were retroactively applied to individuals who did not obtain coverage since 2014. However, President Trump signed an executive order in 2017 that effectively removed the penalty for not having health insurance. The order instructs the IRS not to impose the penalty for individuals who do not maintain health insurance.

Recommendations for Low-Income Individuals

If you are a low-income individual, you may qualify for Medicaid, a government-sponsored health insurance program for low-income Americans. Medicaid coverage varies by state, so it’s important to check with your state’s Medicaid agency to determine your eligibility and enrollment options.

If you do not qualify for Medicaid, you can seek assistance through your state’s Health Insurance Marketplace. The Marketplace is a federal exchange where individuals can purchase health insurance plans that meet the ACA requirements. You may be eligible for financial assistance or subsidies to help cover the cost of your health insurance premiums.


The ACA’s individual mandate is a complex topic with various implications for individuals and families. The exemption for low-income individuals provides financial relief for those who may struggle to afford health insurance. President Trump’s executive order has removed the penalty for not having health insurance, but it is still essential to understand your options for obtaining affordable health coverage. If you are unsure about your eligibility or need assistance in finding a health insurance plan, consider reaching out to a licensed agent or visiting your state’s Health Insurance Marketplace.

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