Prior to the Affordable Care Act, an estimated 47 million Americans lived without health coverage. Unpaid medical bills were the number one reason for personal bankruptcy in America.

Because the costs of health care are rising much faster than overall inflation rate, no one is immune from the devastating financial hardship that can arise from a serious medical illness or injury. The cost of insurance premiums, deductibles, and out of pocket expenses could not only drain your personal finances but potentially cripple you financially. That is why it pays to do your homework, know your options and utilize what's out there. If you are not covered by an employer-sponsored health plan, you can search for private health insurance on your own or through the Health Insurance Marketplace at www.healthcare.gov.

Fortunately, many people are covered by employer health plans. Most employers subsidize the actual cost of insurance to you. In years past, many employers used to shoulder the entire burden of your health insurance premiums. Today, an increasing number of employers are asking you to pay a portion of your insurance premiums.

It is important to realize two things:

• Obtaining coverage through an employer has many features and benefits you most likely will not be able to obtain individually
• Employer coverage can reduce your premium payments dramatically

One provision of the Affordable Care Act is the minimum coverage provision, also called the individual mandate. Under the ACA, just about everyone is required to have health insurance as of January 1, 2014. Otherwise, they are liable for a tax penalty. Coverage does not have to be supplied through the exchange. People can also get healthcare coverage through an employer, COBRA, Medicare, veterans' benefits, etc. The penalty for not having health insurance, as of 2015, is $325 per adult and $162.50 per child. The maximum penalty per family is $975 or 2% of yearly household income that exceeds the tax filing threshold, whichever is higher. In 2016, the penalty is $695 per adult and $347.50 per child. The maximum penalty per family is $2,085 or 2.5% of yearly household income that exceeds the tax filing threshold, whichever is greater. The maximum penalty is the national average premium for a bronze plan. If you owe a penalty, it will be assessed on your income tax return.

IMPORTANT NOTE: If you are over 65, see the section on Medicare.