Obamacare Penalty 2015: Health Insurance Fines to Increase Varying on Income But Exemptions May Save People Money
Individuals and families without health insurance coverage for 2015 should expect a penalty fine higher than in 2014.
All taxpayers are expected to report to the Internal Revenue Service (IRS) on whether they had health insurance or not during 2014 as required by the Affordable Care Act (ACA), also referred to as Obamacare.
As Latin Post reported, the penalty fee for not having health insurance will vary on a person's income. For 2014, the IRS had announced the penalty is 1 percent of taxable income or $95 person, pending which cost is higher based on the 2014 federal tax return. According to HealthCare.gov, the penalty for individuals is only for those earning more than $10,000 for income. The maximum penalty is the national average premium for the bronze plan.
For the 2015 tax season, the penalty will increase to 2 percent of the yearly household income or $325 per person for the year. The IRS will expect the higher cost from the consumer. For families, the penalty is $325 per person, and $162.50 per child under 18 years old, although the maximum penalty per family will be $975.
HealthCare.gov has already notified increases for the 2016 season. For 2015, the penalty is 2.5 percent of the individual's income or $695 per person, once again depending on which of the two options are higher. After 2016, the penalty percentage will be adjusted for inflation.
If the penalty is not paid, HealthCare.gov stated, "The IRS will hold back the amount of the fee from any future tax refunds. There are no liens, levies, or criminal penalties for failing to pay the fee."
Most Americans, however, may be eligible for exemptions from the penalties. HealthCare.gov noted the exemptions include:
- You're uninsured for less than three months of the year,
- The lowest-priced coverage available to you would cost more than 8 percent of your household income,
- You don't have to file a tax return because your income is too low,
- You're a member of a federally recognized tribe or eligible for services through an Indian Health Services provider,
- You're a member of a recognized health care sharing ministry,
- You're a member of a recognized religious sect with religious objections to insurance, including Social Security and Medicare,
- You're incarcerated (either detained or jailed), and not being held pending disposition of charges,
- You're not lawfully present in the U.S.,
- You qualify for a hardship exemption.
Undocumented immigrants are not eligible to receive health insurance through the ACA, however, immigrants with statuses including lawful permanent resident, green card holder, asylee, refugee, Cuban entrant and victims of trafficking or battery are eligible to receive insurance.
Hardship exemptions include if the individual is either homeless, evicted or facing eviction or foreclose in the last six month, received a shut-off notice from a utility company, recently experienced domestic violence, death of a close family member or filed for bankruptcy.
HealthCare.gov and the state-based health insurance exchanges are currently on their second open enrollment period, which ends on Feb. 15.
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