Beginning in 2014, a non-exempt taxpayer who fails to maintain minimum essential healthcare coverage must pay an annual tax penalty through their tax return filing. The term minimum essential coverage means a government sponsored program including Medicare, Medicaid, CHIP, Tricare, Veterans’ health care program, and The Peace Corps volunteer health plan. The term also includes an eligible employer sponsored plan, coverage under a health plan offered in the individual market within a state, coverage under a grandfathered health plan, and other coverage such as coverage under a state health benefits risk pool. The maximum tax penalty increases between 2014 and 2015, and in 2016 is fully phased-in. After 2016, the penalty will be indexed for inflation.