The guidelines for 2012 begin at $11,170 for one person and increase by $3,960 for each additional person in the household. For a family of four, the 2012 guideline is $23,050. Tax credits for buying health insurance would be available for four-person households with taxable earnings up to 400% of that level, or $92,200. (The size of a household is determined by how many people are included on the head of household's tax return.)

So to avoid a penalty for not buying insurance, members of a household would have to determine the annual premiums on one of the lowest-quality plans in a state exchange, figure out how large a tax credit their income would entitle them to, and then calculate if the resulting out-of-pocket expense would be more than 8% of their household's modified adjusted gross income. If it was, they would not pay a penalty if they decided not to buy health insurance.

The Kaiser Family Foundation has a Health Reform Subsidy Calculator that helps simplify this complicated calculation.

The penalties

The actual individual mandate penalties under the Affordable Care Act are perhaps the easiest part of the program to understand:

  • In 2014, the annual penalty will be $95 per adult and $47.50 per child, up to a family maximum of $285 or 1% of family income, whichever is greater.
  • In 2015, the penalty will be $325 per adult and $162.50 per child, up to a family maximum of $975 or 2% of family income, whichever is greater.
  • In 2016, the penalty will be $695 per adult and $347.50 per child, up to a family maximum of $2,085 or 2.5% of family income, whichever is greater.

"Most people think of it as an annual penalty," notes Larry Levitt, a senior vice president at Kaiser. "But it is in fact a monthly thing, and you would pay a penalty for any month that you are uncovered." However, a person may be without coverage for up to three months without triggering the penalty.

Click here to become a fan of MSN Money on Facebook

More from U.S. News & World Report: