In less than 30 days, the deadline to enroll in a plan through the Affordable Care Act will be upon us. This year, the individual shared responsibility payment, otherwise known as a tax penalty, will go into effect and if you’re uninsured for more than three consecutive months, you’ll be faced with paying the penalty. With medical bills as a leading cause of personal bankruptcy in the U.S, not having health insurance could prove to be a very costly mistake.
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 that will be applied when you file your 2014 income tax return.
The tax penalty will increase over the next three years as follows:
1% of total household income or $95 per adult ($47.50 per child), whichever is greater.
2% of total household income or $325 per adult, whichever is greater.
2.5% of total household income or $695 per adult, whichever is greater.
However, there are certain circumstances which exempt you from the tax penalty:
- You’re uninsured for less than three months of the year
- The lowest-priced coverage available to you would cost more than 8% of your household income
- You don’t have to file a tax return because your income is too low (Learn about the filing limit.)
- You’re a member of a federally recognized tribe or eligible for services through an Indian Health Services provider
- You’re a member of a recognized health care sharing ministry
- You’re a member of a recognized religious sect with religious objections to insurance, including Social Security and Medicare
- You’re incarcerated, and not awaiting the disposition of charges against you
- You’re not lawfully present in the U.S.
If you miss the March 31 deadline, you’ll be subject to the penalty unless you qualify for an above mentioned tax penalty exemption. To ensure you are exempt you can enroll in a health insurance plan and also enjoy the benefits and peace of mind that comes with being insured.
To compare your health insurance options and enroll in a plan before the March 31 deadline, visit the GoHealth Marketplace.