How to Avoid Penalties Under the Affordable Care Act


Peoria based Samaritan is one alternative to health insurance to avoid Obamacare penalties
Peoria based Samaritan is one alternative to health insurance to avoid Obamacare penalties

Buy insurance by Sunday, January 31, 2016 which is the last day to buy health insurance to avoid a $695 per adult and $347.50 per child penalty, or 2.5% of annual household income whichever is higher.  The only way to avoid the penalty is to have insurance that qualifies as Minimum Essential Coverage, qualify for a life event authorized by the U.S. department of Health and Human Services, or become a member of a faith based healthcare cost sharing ministry. (Faith based health care cost sharing satisfies the Federal health care law’s (Affordable Care Act) requirement that individuals purchase insurance or pay a penalty-tax (see 26 United States Code Section 5000A, (d) (2) (B)).).

Exemptions from the Affordable Care Act to Avoid a Penalty

There are certain situations that enable a U.S. citizen to avoid the penalty mandated by the Affordable Care Act.

  1. If you qualify for post January 31 2016 Special Enrollment Period for people who qualify based on certain Life Events.
  2. If you join a faith based healthcare cost sharing ministry that shares medical expenses instead of buying traditional insurance.  Ministry groups that obtained an exception to the Affordable Care Act law enable members some shelter not only from high medical costs but from penalties. Only ministries in continuous operation since at least Dec. 31, 1999 are exempt from the ACA. The carve-out was intended to satisfy what at the time were relatively small religious groups that argued that their non participation was a matter of religious freedom.  Check reviews and coverage details because these groups are not insurance and may have some risks.  Examples of ministries include:
  3. If you are eligible for insurance that qualifies as Minimum Essential Coverage.

Minimum Essential Coverage (MEC)

Any insurance that meets the Affordable Care Act requirement for having health coverage. If you have MEC, you don’t have to pay the fee for being uninsured (See, Minimum Essential Coverage). Examples include:


The Wall Street Journal

Calculating Your Obamacare Penalty

In 2016, a family of four with $75,000 in household income with two adults and two children at home may owe a penalty of over $2,000 if they choose not to secure health insurance.

Penalty Calculator





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Michael F. Arrigo

Michael is Managing Partner & CEO of No World Borders, a leading healthcare management and IT consulting firm. He serves as an expert witness in Federal and State Court and was recently ruled as an expert by a 9th Circuit Federal Judge. He serves as a patent expert witness on intellectual property disputes, both as a Technical Expert and a Damages expert. His vision for the firm is to continue acquisition of skills and technology that support the intersection of clinical data and administrative health data where the eligibility for medically necessary care is determined. He leads a team that provides litigation consulting as well as advisory regarding medical coding, medical billing, medical bill review and HIPAA Privacy and Security best practices for healthcare clients, Meaningful Use of Electronic Health Records. He advises legal teams as an expert witness in HIPAA Privacy and Security, medical coding and billing and usual and customary cost of care, the Affordable Care Act and benefits enrollment, white collar crime, False Claims Act, Anti-Kickback, Stark Law, physician compensation, Insurance bad faith, payor-provider disputes, ERISA plan-third-party administrator disputes, third-party liability, and the Medicare Secondary Payer Act (MSPA) MMSEA Section 111 reporting. He uses these skills in disputes regarding the valuation of pharmaceuticals and drug costs and in the review and audit of pain management and opioid prescribers under state Standards and the Controlled Substances Act. He consults to venture capital and private equity firms on mHealth, Cloud Computing in Healthcare, and Software as a Service. He advises ERISA self-insured employers on cost of care and regulations. Arrigo was recently retained by the U.S. Department of Justice (DOJ) regarding a significant false claims act investigation. He has provided opinions on over $1 billion in health care claims and due diligence on over $8 billion in healthcare mergers and acquisitions. Education: UC Irvine - Economics and Computer Science, University of Southern California - Business, studies at Stanford Medical School - Biomedical Informatics, studies at Harvard Medical School - Bioethics. Trained in over 10 medical specialties in medical billing and coding. Trained by U.S. Patent and Trademark Office (USPTO) and PTAB Judges on patent statutes, rules and case law (as a non-attorney to better advise clients on Technical and Damages aspects of patent construction and claims). Mr. Arrigo has been interviewed quoted in the Wall Street Journal, New York Times, and National Public Radio, Fortune, KNX 1070 Radio, Kaiser Health News, NBC Television News, The Capitol Forum and other media outlets. See and for more about the company.

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