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How big is the penalty for not having insurance?

If someone does not have health insurance after Obamacare (Affordable Care Act) goes into effect, how much will they have to pay in a penalty?
    Here is our video on tax penalties: https://www.ehealthinsurance.com/affordable-care-act/videos/how-much-are-the-obamacare-tax-penalties

    The tax penalties go into effect in 2014, which means, if you’re uninsured for more than three months in 2014, you may incur the tax penalty and that penalty would be applied when you file your 2014 income tax return.


    If you don’t qualify for an exemption to the Affordable Care Act’s mandate to purchase qualifying health coverage, then you will be subject to a tax penalty.


    The penalty is phased-in over a three year period.

    • In 2014, the penalty will be the greater of 1.0% of taxable income or $95 per adult and $47.50 per child (up to $285 per family).
    • In 2015, the penalty will be the greater of 2.0% of taxable income or $325 per adult and $162.50 per child (up to $975 per family).
    • In 2016, the penalty will be at the greater of 2.5% of taxable income or $695 per adult and $347.50 per child (up to $$2,085 per family).
    • After 2016, the penalty will be increased annually by the increase to the cost-of-living.

    Households with incomes above 400% of FPL will be exempt from paying tax penalties if insurance in their area costs more than 8% of their taxable income, after taking into account employer contributions or tax credits.


    People will be able to apply for exemptions to the tax penalty if

    1. They have financial hardships,
    2. Religious objections,
    3. If they’re an American Indian,
    4. If they’re uninsured for less than three months,
    5. If they’re an undocumented immigrant,
    6. If they’re incarcerated,    
    • Is this a monthly penalty?  Great info, thank you!
    • No. It is a yearly penalty and will be enforced when you file your income taxes.
    • Is the penalty based on income before or after deductions?
    • The penalty is actually based on your Modified Adjusted gross income (MAGI). Check out this PDF to find out to calculate MAGI: http://laborcenter.berkeley.edu/healthcare/MAGI_summary13.pdf
    • I am currently unemployed.  What if I still don't have a job early into 2014 and don't get insurance by March 31?  How will they determine 1% of my 2014 income to fine me?
    • Wow. Undocumented immigrants can "apply" for exemption?  If the goal here is to reward lawbreakers, and punish those who follow the rules, mission accomplished!
    • That is the craziest thing I have ever heard!
    • What do they define as a financial hardship?  I am unemployed through no fault of my own, and try every day.  But I have no income, to me that is a financial hardship!
    • Do not comply, pocket the $800 per month (new rate which is 2x higher premium and 3x higher deductible then pre ACA plan), and use the religious exemption.
    • Have you taken any Premium Tax Credit into account?  There are strict requirements for the religious exemption to be met, and you must apply for it and be approved.
    • No, this is a yearly penalty
    • 2.Religious objections,  looks like an easy out.
    The employer mandate has been deferred, but not the requirement that individuals have coverage. (Many of the political pundits expect this to be subject to a Technical Correction.)
    http://rubinontax.floridatax.com/2013/07/obamacare-employment-mandate-deferred.html
    so what if someone cannot afford health insurance will they be still penalized, is not obamacare infringing on our rights to choose, say someone doesnt believe in health care and say they use natural medicine
    • SEE CONCERNS BELOW

      Alot of people use natural remedies, such as myself. I see no point in going to the doctor for a minor cold, virus, flu, etc. where they will in the end.... just charge visit fees for the illness to run its coarse.
      Everyone and there grandmaw will have doctors offices flooded with sick ppl and the REAL sick ppl will have to wait hours to see a doctor, not to mention the pharmisuticals will be making tons of money and producing an ungodly amount of chemicals. This can be dangerous, This world is already dangerous enough with all the abuse of medications!!

      1) How will the medicaid for the low income families be affected?
      2) Will medicaid even exist anymore?
      3) If ex husband is required to supply health coverage by court order, We file seperate but I dont actually pay for insurance because he does through employer......WHAT OR HOW will I file?

      Thanks in advance for suggestions and help.
    • Medicaid is still in effect, although some states have not chosen to partake in the Medicaid expansion program.   You can still file a separate tax return.
    I believe that next year 2014, the penalty will be either (the greater of) 1.0% of your taxable income or $95.00/adult plus $47.50/child ($285.00 max per family).
      Didn't the penalty enforcement get postponed till 2015?
      • The penalty starts in 2014 and will be on your 2014 tax return you file in 2015.
      • Graham, the individual mandate - which is this tax penalty - was not postponed.

        Under the law, the tax penalty was always phased in over a three year period. It's up to 1% of income in 2014, 2% in 2015 and 2.5% of income in 2016.

        The penalty can't exceed the national average premium for a bronze level plan, and the minimum is $95 for an adult in 2014.
      • Sure looks like the best financial decision is to not comply
      • Only until you get in an accident or end up in the hospital.