Affordable Care Act: Individuals & Families
How do the ObamaCare Tax penalty work?
Your tax penalty (shared responsibility fee) for not having insurance is paid on your taxes at the end of the year.
If your taxable income is below 133% of the FPL you are exempt from this tax.
2014=$95 per person per year or 1% of your Income
2015=$325 per person per year or 2% of your Income
2016=$695 per person per year or 2.5% of your Income
2017=Tax Penalty will increase by the rate of inflation going forward, or 2.5% of your Income
What is the individual mandate?
The individual mandate is officially part of the shared responsibly provision and is called a individual shared responsibility fee. The fee works like this: if you don't have insurance by January 31st, 2014 or obtain an exemption you get charged a fee for every month you don't have insurance on your year-end taxable income.
What is an exemption? Do I qualify for an exemption?
Those who have insurance through work or currently do not have insurance obviously have nothing to worry about when it comes to the tax penalty. Those on Medicare or Medicaid will also be exempt. Aside from this Americans below the %133 FPL threshold will be exempt as well. Overall around 26 million Americans will be exempt from the tax penalty.
Several groups are exempt from the requirement to obtain coverage or pay the penalty, including:
• People who would have to pay more than 8 percent of their household income for health insurance
• People with incomes below the threshold required for filing taxes (in 2012, $9,750 for a single person and $27,100 for a married couple with two children)
• People who qualify for religious exemptions
• Undocumented immigrants
• People who are incarcerated
• Members of Native American tribes
For those who can afford it and choose not to purchase health insurance the tax will be unavoidable. The money collected from these taxes goes towards funding ObamaCare and subsidizing hospitals who will have to cover unpaid emergency room visits. The money is also a down payment on your almost inevitable use of the health care system.
Other Exemptions to the tax penalty?
Financial hardships, religious objections, you are either an American Indian or undocumented immigrant or uninsured for less than 3 months. See below.
© 2012 Dover Insurance & Financial Services, Inc.