Are you aware of the penalty that comes with not having health insurance? If you’re one of those who think it’s okay to skip a month or two, then listen up! The Affordable Care Act (ACA) requires individuals to have minimum essential coverage for every month.
But how many months can you go without insurance before facing penalties? Don’t worry; we’ve got your back. In this blog post, we will discuss everything you need to know about avoiding penalties by maintaining continuous coverage. So let’s get started and ensure that you are protected year-round!
The Affordable Care Act
The Affordable Care Act (ACA) requires that most people have health insurance or pay a penalty. The minimum amount of coverage required to avoid the penalty is called “minimum essential coverage.”
There are a few different ways to get minimum essential coverage:
-You can buy an individual health insurance plan through the Health Insurance Marketplace.
-You can get a job-based plan.
-You can join a Medicare, Medicaid, or Children’s Health Insurance Program (CHIP) plan.
-You can have other types of health coverage, like a student health plan, temporary health insurance, or TRICARE.
If you don’t have any of these types of coverage, you’ll probably have to pay the penalty for not having health insurance when you file your taxes for the year. The payment for not having health insurance is sometimes called the “individual shared responsibility payment” or the “health insurance penalty.”
The Shared Responsibility Payment
The Shared Responsibility Payment is the amount that you would owe if you don’t have health insurance and don’t qualify for an exemption. The amount is based on your income and family size. For example, in 2016, the payment would be $695 per adult and $347.50 per child under 18, or 2.5% of your household income, whichever is greater. The maximum payment is capped at the national average premium for a bronze plan.
How to avoid the Shared Responsibility Payment
The Shared Responsibility Payment, or SRP, is a penalty that can be imposed on taxpayers who do not have qualifying health insurance coverage. The payment is calculated based on the number of months that the taxpayer was without coverage and the taxpayer’s household income.
There are a few ways to avoid having to pay the SRP. One way is to have qualifying health insurance coverage for at least 9 out of 12 months during the tax year. This can be done by having an employer-sponsored plan, a plan obtained through a Health Insurance Marketplace, or a grandfathered health plan.
Another way to avoid the SRP is to qualify for an exemption from the requirement to have health insurance coverage. There are several exemptions available, including exemptions for financial hardship, religious beliefs, and membership in certain Native American tribes.
Finally, taxpayers can also avoid the SRP by making a payment when they file their taxes. This payment is known as the individual shared responsibility payment and is made with the taxpayer’s tax return.
Conclusion
In conclusion, having health insurance for at least 10 months of the year is important to avoid any penalties from the IRS. It’s a good idea to plan ahead and make sure that you have coverage for all 12 months of the year so you don’t have to worry about facing penalties.
Additionally, it’s important to shop around for different plans and find one that meets your needs in terms of premiums, deductibles, copayments and more. Doing this will help ensure you not only avoid penalty fees but also get quality coverage with an affordable price tag.
