Starting January 1, 2014, the individual mandate under the Affordable Care Act goes into effect. The mandate requires you to buy a minimum amount of health insurance coverage. There are some individual exceptions, including individuals who pay more than 8% of their taxable income for health insurance, individuals with incomes below the threshold required for filing taxes, individuals who qualify for religious exemptions, undocumented immigrants, incarcerated individuals, and members of Native American tribes.

Upon filing your taxes, you will be required to show that you have health insurance.  As the law stands now, the 2014 tax penalty for not having a minimum amount of coverage is the greater of $95 or 1% of taxable income. This penalty will increase yearly as follows; In 2015, the penalty will be the greater $325 or of 2.0% of taxable income. In 2016, the penalty will be the greater of $695 or 2.5% of taxable income.