Affordable Care Act
What is the Affordable Care Act?
Under the Affordable Care Act, the federal government, state governments, insurers, employers, and individuals share responsibility for improving the quality and availability of health insurance coverage in the United States.
The ACA creates the Health Insurance Marketplace, also known as the Marketplace. At the Marketplace, which may be a State-based or Federally-facilitated Marketplace, taxpayers can find information about health insurance options, enroll in qualified health plans and, if eligible, obtain help paying premiums and out-of-pocket costs. A taxpayer is allowed a premium tax credit only if the taxpayer, or a member of the taxpayer’s family for whom the taxpayer claims a personal exemption, enrolled in a qualified health plan through a Marketplace. This credit helps eligible taxpayers pay for coverage.
The ACA also includes the individual shared responsibility provision, which requires individuals to have qualifying health care coverage for each month of the year, qualify for a coverage exemption, or make a shared responsibility payment when filing their federal income tax returns. For purposes of the ACA, qualifying health care coverage is also called minimum essential coverage. Most taxpayers already had minimum essential coverage prior to the start of the year and only had to maintain that coverage during the entire year. If taxpayers and their dependents had minimum essential coverage for each month of the year, the taxpayer will simply check a box indicating that coverage when filing the federal income tax return. No further action is required.
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