According to the health care reform plan by President Obama which is as well recognize within the scope of knowledge as “Obamacare” or “Affordable Care Act”, all citizens of United States must buy or have health insurance. This apply to people who have income more than a determined threshold. You can easily find affordable health insurance coverage over the market place. According to financial assistance, seven out of ten US citizens may procure health insurance plans with premiums or less than $75 per months. In the case that you have the cash to cover health insurance but you decide not to buy it then you will get a fee or a penalty. Many people raised this question “What is the penalty for not having health insurance?”
This penalty can also be called a “individual mandate”, or “fine” which is referred to a fee that you must pay in term of individual common duty.
You are obliged to reimburse the penalty for any month your tax dependents such as your spouse or children or you don’t have credential health insurance coverage or MEC (minimum essential coverage). You should settle the payment once you file your federal tax return for the year you don’t have the insurance coverage.
If you are uncovered only one or two months, you don’t need to pay the fee at all. If you don’t have health insurance coverage for more than three months regardless of having access to low price insurance, then you will be required to pay the penalty. You should cover only 1/12 of the yearly sum for each month you or your tax dependents do not have coverage in the case you have coverage for part of the year
In the event that you don’t pay that fee, the Internal Revenue Service will hold the sum of the fee back from any coming tax refunds. There will be no tax duties, liens or criminal punishments for neglecting to cover the fee.
Also read: Visitor health insurance USA
Will there be any changes in health insurance coverage plan in 2017?
Obamacare ACA revocation update – the 45th president of United States, Donald Trump, along with congressional republican have begun the undertaking to revoke or annual Obamacare in 2017. The difficult task they are currently encountering is that there has been no widely agreement on the Obamacare replacement plan and ACA repeal could lead to inaccessibility of health care insurance for millions of US people and will cause remarkable financial great uncertainty inside the American Health care system.
From the perspective of health care penalty, we strongly expect that the individual mandate have tendency to be removed and replaced by another plan. If it’s the case, for those who don’t possess a health insurance coverage in 2017 may only be prone to a fragmentary or no penalty when finagling taxes in 2018.
Here is how much you must pay if you don’t have health insurance coverage in 2016 and 2017
There are two different ways to calculate the fee that you must pay.
First, it is calculated as a portion of your family earnings.
Second, it is calculated as per person.
You will be required to pay whichever is greater.
Calculation by percent of money received on a regular basis for work or through investment.
- For 2016 and 2017 the fee is 2.5% of your family earnings (was only 2% in 2015 and only 1% in 2014)
- Maximum: overall annually premium for the national mean of a Bronze plan vended through the Marketplace ($9,800 in 2014, $12,500 in 2015, 13,000 in 2016). For 2017, the highest amount of the punishment of breaking this law is regarded as likely to remain the same as 2016 or become higher marginally a long with inflation.
- By utilizing this method, simply the piece of your family earnings that’s above the yearly tax filing condition is counted.
Calculation by per person
- $695 per adult for 2016 and 2017 (the fee was only $325 in 2015 and $95 in 2014)
- $347.50 per child under 18
- Maximum: $2,085
- By utilizing this system, you need to pay simply for people in your family or in your home who don’t possess insurance coverage.
Obamacare or Affordable Care Act Tax forms
Additional complex excise returns is expected this year for some tax payers with the requirement to regard for health insurance coverage in a specified way which is consider to be a piece of the individual mandate of the non-existing before Affordable health care regulations.
If you buy you coverage on the health coverage interchanges with the action of helping of federal contributions, you will get a form 1095-A detailed the handling and have to settle your payments with your income level.
However it is possible to prove your compliance via your tax filing if you get your health insurance through your government or employer subsidized program like Medicare or Medicaid. To do this, you just check a box on your normal tax (1040 series) return validating you had insurance.
Is there any exception of penalties from not having health insurance?
The answer is YES! First of all, in the case that you have the smallest amount essential coverage meet the individual mandate then you won’t face the penalties.
And also, there are some allowed exemptions from the individual mandate. Reading this part to see what are exemptions available.
Individual mandate with smallest amount essential coverage
The individual common duty provision – minimum vital coverage (ISR) supply you the aspects on which coverage underneath the non-existing before health care regulations.
In the case that you encounter this coverage, you won’t face penalties.
The exemptions from the penalty of not having insurance are available
For very low incomes people and those who have specific conditions can get an exemption from the requirement to have health insurance and no need to pay the fee.
You are qualified for exemption to pay for the penalty in some circumstance as following:
- Certain handicaps, life occurrences, health coverage or financial state, membership in certain divisions such as acknowledge religious sect with religious objection to insurance, comprising or containing Medicare and social security.
- You are imprisoned or confined (either jailed or detained) and are not being held awaiting disposition of charges.
- The lowest-price coverage available to you would cost more than 8% of your household income.
- You can request most health coverage exemptions on your federal tax reinstatements. Some oblige you to fill out and dispatch an application to the Market place.
- No need to pay for the fee any month you have qualifying health coverage. You don’t need to pay the payment if you are uncovered only one or two months.
- Illegal immigrants
Looking for health insurance for non us citizens?
- Homeless, expelled in the past six months, received a shut-off notification from a value establishment are suitable for hardship exemption.
You will require to prove verification for these in your tax reinstatement (Form 8965) with your tax return when requesting the exemption and the IRS will be examining these somewhat thoroughly.
For US inhabitants or Residents who are situated overseas
For those who meet the IRS foreign nonnative residency specification (in general terms 330 full days situated beyond the boundaries of the United States during a twelve months’ period) are also be able to request exemption from the individual mandate punishment via Form 8965. If residing overseas for a limited period of time that isn’t entitled to privilege you as a nonnative citizen for tax purposes coverage made accessible for use by your local company (under an expatriate health care plan) can take into account as competent health coverage that prevents them from your punishment. One exemption that will be exceedingly pertinent to US inhabitants living oversea for a small section of a year is the exemption for a brief coverage gap. This exemption gives that no shared duty payment will be due for a once-per-year difference in coverage that lasts less than three months.
Looking for health insurance for expats? Click here to read in details.
How to keep away from the Obamacare punishment
The most straightforward and only one manner to avoid the punishment is by having health insurance coverage. The ACA arranged the health insurance marketplace at Healthcare.gov to obtain this possible to be done. There, you are able to find out for prices and plans, or be managed to your state-specific market place that make available the service for use in your area.
In case that you don’t want to get the insurance through the market place then you also can purchase the coverage through a private insurer, your employer or through Medicaid if you are qualified.
Some have selected to opt out of Obamacare, determining that the punishment is less of a burden than purchasing insurance; most of them will be fined. However, others might be exempt and can stay uninsured or have intervals of non- coverage without facing the punishment.