No Health Coverage? Be Prepared to Pay a Hefty Price

No Health Coverage? Be Prepared to Pay a Hefty Price

By Wiss (331 words)
Posted in Tax Services on January 25, 2017

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As of now, Obamacare’s individual mandate requests that you purchase health insurance. If you can afford the coverage and refuse to acquire it, a big fee could be headed your way. For the tax year of 2016, the Individual Shared Responsibility fine skyrocketed to 2.5 percent of an individual’s complete household adjusted gross income. However, for the new year and beyond, the amount will stay at 2.5 but the flat fee will be regulated for inflation. For each month you do not have coverage, you, your significant other, or any tax dependent must pay the fee when filing tax returns.

To avoid this penalty, is it required that you enroll in qualifying insurance coverage, frequently titled “minimum essential coverage.” Qualifying insurance encompasses coverage bestowed by an employer, the Health Insurance Marketplace, the government, and an insurance establishment. This qualification excludes insurance that can provide partial benefits like coverage made solely for dental or vision repair, workers’ compensation, or for a particular illness or condition

Though the majority of Americans must be covered, there can be exceptions to the rule. You may be exempt from the penalty if:

  • Your income is less than the income tax threshold
  • Your income falls below 138 percent of the poverty line and your state did not expand Medicaid coverage to adults at your income level
  • The lowest plan available is priced higher than 8.05 percent of your income
  • Your gap in coverage is below three consecutive months
  • You have a hardship, including domestic violence, bankruptcy, and eviction
  • You are member of an organization that exempts you from having insurance

Remember, if you pay the mandate, you will not receive any health insurance coverage—you are solely paying your fine. If you become sick or injured, you are still responsible for all of the costs of your medical care. For more information about the individual shared responsibility provision, visit the IRS’ website: www.IRS.gov/aca

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