As of 2014 most Americans will be required to carry health insurance under the healthcare mandate of the Affordable Care Act (ACA) or pay a penalty, referred to as “the individual shared responsibility payment.” The deadline to enroll in coverage through the health insurance exchange in order to avoid the penalty has been extended to March 31, 2014.
Individuals who can afford coverage but choose not to purchase health insurance will face a penalty in 2014 of 1% of their annual income, or $95, whichever is greater. The penalty will increase over time, maxing out in 2016 at 2.5% of a person’s household income, or $695 per person. Note that folks paying the penalty under the $95 per person method would only pay $47.50 per uninsured child.
The penalty payment is made when a person files their 2014 taxes, which are due in April 2015.
Who Is Exempt from the Penalty?
Some people may qualify for an exemption from the penalty, including:
- Those for whom the lowest priced plans would exceed 8% of their household income
- Those who don’t file a tax return because their income is below the filing limit
- Those who are uninsured for less than three months of the year
These are just some of the exceptions—visit the healthcare.gov website for a full listing and for information about applying for an exemption.
Many individuals will qualify for a subsidy or tax break to help pay for the cost of coverage. While, to some, health insurance may just seem like a burdensome expense, not having coverage could put a person in a major financial predicament, especially in cases of catastrophic accident or illness. Call Benefit Packages today to find out whether you qualify for a subsidy or tax break for California health insurance and to learn more about your options for coverage.