As explained by my employer:
"You Must Have Health Insurance – It’s the Law
The health care reform law requires all legal U.S. residents to have basic health insurance coverage. This part of health care reform is called the “individual mandate.” The individual mandate goes into effect in January 2014.
When you file your taxes, you’ll need to show you have some type of health coverage or can qualify for a credit. It could be an employer’s plan, a marketplace plan, or a Medicare or Medicaid plan. You also can buy coverage directly from an insurer through the traditional market.
If you don’t have coverage, you’ll pay a tax penalty that will get bigger over time. The tax penalty in 2014 will be $95 per individual and will increase to $695 per individual in 2016. For a family, the tax is capped at $285 in 2014 and will rise to $2,085 in 2016. Since it’s a tax penalty, the IRS will collect the penalty through tax returns.
While there is much uncertainty regarding health care reform, we will keep you updated on any new developments as they occur."
They are encouraging the 'other option' for health care, rather than take my employers offered health care.