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Health care reform: The individual mandate

Starting in 2014, almost everyone in the United States will be required to have health insurance -- one of the biggest changes to the health care system that will be brought about by health care reform. The main reason behind the requirement: In order to provide everyone with health insurance, no matter what their medical conditions, everyone needs to be in the pool in order to spread the risk.

What happens if you decline? Get ready to pay up at tax time. Those who don't have coverage will pay a yearly penalty, phased in from 2014 to 2016, of $695 per person up to a maximum of $2,085 per family, or 2.5 percent of household income, whichever is greater.

There will be many available routes to buying health insurance coverage: You can buy individual coverage, get group health insurance through an employer or purchase it through a health insurance exchange – marketplaces set up by states that will show you available plans, costs and insurer ratings. Everyone will be required to report proof of health insurance when they file their federal income taxes.

People who meet income guidelines will be eligible for subsidized health insurance when they buy a plan through an exchange.

There are exceptions to the individual mandate: People who don't make enough income to pay taxes and those who would have to spend 8 percent or more of their income on the lowest-cost health insurance plan are exempt from the rule. Also exempt are immigrants who aren't legal residents, jailed Americans and people who object based on religious beliefs.

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