The individual responsibility clause of the Affordable Care Act (ACA), also known as the individual mandate, requires all Americans to have health insurance by January 1, 2014, or pay a penalty tax.
How Much Will the Penalty Be for not Having Health Insurance?
You may have heard the figure $95 per person. That is the basic penalty in 2014 for an unmarried individual, earning less than $19,500/year, with no dependents.
If you don’t fit that category, the penalty — which is actually not a penalty, but a tax — is a bit more complicated.
How the Penalty Works
| YEAR | PENALTY WILL BE THE GREATER OF: |
| 2014 |
|
| 2015 |
|
| 2016 |
|
| 2017 and beyond |
|
Notice that wealthier households will pay a percent of income rather than a flat amount. For example: in 2016, an individual earning below $37,000 would pay $695 (flat-dollar calculation) while an individual earning $200,000 would pay $5,000 (2.5% of income).
The reason we say the penalty is actually a tax is that it will be assessed on your income tax return. This means it will be added to any amount of tax you owe, and deducted from any refund amount you are due.
Calculate Your Penalty Amount
We found a quick and easy calculator you can use to check the 2014 penalty. Check it out.
Purchase Health Insurance for all Family Members
Before you think about just paying the penalty, keep in mind that having health insurance is about more than paying a premium. It is about safeguarding yourself and your family from what can happen without access to medical care.
Exceptions
The simplest way to avoid paying the penalty tax is to purchase health insurance for yourself and other members of your household!
There are a few other exceptions:
- You are part of a religion opposed to acceptance of benefits from a health insurance policy.
- You are an undocumented immigrant.
- You are incarcerated.
- You are a member of certain Native American tribes.
- Your family income is below the threshold requiring you to file a tax return ($9,350 for an individual in 2010; $18,700 for a family in 2010).
- You have to pay more than 8% of your income for health insurance, after taking into account any employer contributions or tax credits.
- You have a gap in coverage for less than a continuous three-month period (this exemption may only be used for one period without coverage in a year).
Virginia Medical Plans can help you avoid the penalty and get health insurance for yourself and/or your family.
Call our office so that we can find the right coverage at the right price for you!
Please be patient as we manage a high volume of calls and emails.
