If you are like a lot of Americans, you might be confused about the health insurance mandate penalty you may face by not buying the personal health insurance mandated by the Affordable Care Act (ACA). If you are able to afford individual health insurance but choose not to purchase it, beginning in 2014, you may end up owing a penalty to the IRS when you file your taxes in the spring of 2015.
According to the Congressional Budget Office (CBO), approximately four million people will opt to pay a penalty every year rather than purchasing health insurance. The majority will be younger Americans who have no children and believe they are healthy enough to go without insurance. While the penalty will be minimal in 2014 and 2015, they will rise in 2016.
What will happen if you don’t pay the penalty? Nobody seems to be sure. The ACA does not allow the IRS to aggressively collect any penalties from people who don’t pay.
If you don’t have health insurance, you may be exempt from the penalties on the following grounds:
You are unemployed and haven’t had insurance for up to three months
Are a member of an Indian tribe
Are an undocumented immigrant
Have religious objections
Are in jail
There are also income provisions that will allow you to avoid a penalty.
For 2014, for each adult, the penalty will be $95, $47.50, and $285 for a family maximum of $285 – or 1% of your family income, whichever penalty is more.
For more information about the penalties you and your families will incur by not getting personal health care insurance, questions about health care reform, or for any other insurance needs, contact D&S Insurance Services today.