One of the major, most talked about aspects of the individual health insurance mandate under the Affordable Care Act is the penalty. Despite many of the flexibilities afforded by the state marketplaces under Obamacare, the operative word here is mandate: for individuals that do not get covered, an automatic penalty will be assessed by the government on next year’s taxes.
Here’s what you need to know.
If you can afford health insurance, based on your income, you are required to be covered. If you think you may be eligible for an exemption from this rule, click here to find out.
You need to be covered for the whole year. If you are not covered for the first 1 or 2 months, the penalty will be waived. But if, for instance, you get covered in January but stop paying your premiums after several months, you will be required to pay the fine.
The fee will be assessed when you file your federal taxes for the year in question (in this case 2016).
Here’s how you can tell about how much your fine will be if you remain uninsured. It’s either $695 per person or 2.5% of that year’s household income, whichever is more.
To calculate your eligible income, only the part of your household income that’s above the yearly tax filing threshold ($10,150 for individuals, $20,300 for couples in 2014) is counted.
Last year, the penalty was 2% (up from 1% in 2014) and depending on what happens with sign-ups and the marketplace this year, it could continue to rise in the next several years.
No matter which way you slice it, getting insured is your best bet. Most people can find coverage for right around the amount that their fee would be and, whether we like to admit it or not, things can happen where not having health insurance would result in a financial disaster for us and our families.
The deadline to have coverage by January 1, 2016 has already passed, but it’s not too late to get covered. Take action now to avoid the penalty. If you have any questions about the Axess Advisors portal, click here or get in contact with us directly here.