The Affordable Care Act requires all US citizens who meet income thresholds to have health insurance. You can choose your employer’s coverage, buy private insurance, join your state’s exchange or receive coverage from Medicare or Medicaid. What penalties will you incur, though, if you don’t have health insurance this year?
Individuals
In 2014, the penalty is the greater of $95 or one percent of your income. That figure rises to $325 or two percent of your income in 2015. By 2016, expect to see a $695 or 2.5 percent penalty. Additional points to remember include:
*Your 2014 penalty is capped at around $9,800, the average price for a bronze plan.
*If you didn’t have health insurance, you’ll owe a pro-rated tax penalty. That means you’ll pay the full penalty if you’re uninsured for the entire year but only one-twelfth the penalty if you’re uninsured for one month.
*The penalty is due for the current year on next year’s tax return. So penalties for 2014 will be due with your 2015 tax return.
Families
The 2014 penalty for an uninsured family caps at the greater of $285 or one percent of income. Expect to pay the greater of $975 or two percent of your income in 2015 and $2,085 or 2.5 percent of income in 2016. These penalties apply whether you have one dependent or a dozen.
Exceptions
If you’re an individual or part of a family that doesn’t make enough money to file income tax, you could either receive a subsidy to buy insurance or be exempt from the tax penalty. Unemployed people are also exempt. Likewise, if you can’t find a policy that costs less than eight percent of your modified adjusted gross income, you won’t owe the penalty.
Enroll Today
With a qualified health insurance plan, you avoid tax penalties. Plus, you’re able to receive the preventative and routine medical care you need. So enroll in the Healthcare Marketplace any time before February 15, 2015 or talk to an insurance agent today and learn more about your options.
