The much publicized Patient Protection and Affordable Care Act (PPACA) is a complicated piece of legislation. Although many of the regulations implementing PPACA are not yet finalized, beginning in 2014 individuals are required to (1) obtain health-care coverage that provides basic insurance  referred to as “minimum essential coverage” (MEC); (2) qualify for an exemption from the coverage requirement; or (3) pay a “shared responsibility” payment.

This last provision, known as the “individual mandate,” is a component of the law that has generated some controversy. Those individuals who secure coverage under a health insurance policy that meets the minimum essential coverage requirements do not have to worry about the individual mandate, while those who do not obtain MEC will be liable for the shared responsibility payment, which is based on the number of months in the calendar year that a person lacks the required coverage. An adult or married couple claiming a dependent is responsible for making the shared responsibility payment if the dependent does not have MEC and is not otherwise exempt. Taxpayers will be required to report his or her liability for the payment on the federal income tax return for the year. Tax refunds may be offset to collect any payment due.