I Just enrolled for insurance through the affordable care act. I was dropped from my health insurance I had through my dad when I turned 26 in September. I know I will be penalized for not having insurance the last 3 months of 2014. I am wondering if the 2% i’ll be penalized is 2% of my annual income for each month or if it is 2% of each months income.


Answer

You can go less than three months in a row without coverage without owing the fee each year. This is due to a short coverage gap exemption, this allows for things like changing jobs or being between coverage options.

This allows for two full months. For the third month you must have at least one day of coverage in that month unless you qualify for other exemptions.

The 2% is only owed if your income is high enough, even then it's divided by 12 for each month you go without coverage or an exemption.

Learn more about the Shared Responsibility Payment and exemptions.

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