Are you tired of constantly worrying about the penalties for not having health insurance? Fear no more! In this blog post, we will give you some valuable tips and tricks on how to avoid paying the penalty for health insurance.
Whether you’re a student, self-employed, or just looking to save money, we’ve got you covered. So sit back, relax and let us guide you through the process of staying healthy without breaking the bank. Let’s get started!
Why You Might Have to Pay a Penalty
If you don’t have health insurance and you don’t qualify for an exemption, you may have to pay a penalty. The penalty is sometimes called the individual shared responsibility payment.
You’ll owe the larger of these two amounts:
2.5% of your yearly household income. (Only the amount of income above the tax filing threshold, about $10,350 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a bronze plan sold through the Marketplace.
$695 per uninsured adult and $347.50 per uninsured child under 18 years old. The maximum penalty per family using this method is $2,085.
You’ll pay the fee on your federal tax return for the year that you don’t have coverage. If you’re uninsured only part of the year, you’ll prorate your payment based on how long you were uncovered.
The fee increases every year. In 2019, it’s 2.5% of your yearly income or $695 per person ($347.50 per child under 18), whichever is greater.”
How to Avoid the Penalty
When it comes to health insurance, the penalty for not having coverage can be pretty severe. In some cases, you may have to pay a fine of up to 2.5% of your household income. That’s why it’s important to know how to avoid the penalty.
There are a few ways that you can do this. First, you can make sure that you have coverage through your employer. If your employer offers health insurance, you will not have to pay the penalty.
Second, you can get coverage through the government Marketplace. The Marketplace offers subsidies to help make coverage more affordable. You may also be eligible for Medicaid if you meet certain income requirements.
Third, you can get a private health insurance plan outside of the Marketplace. There are a number of different options available, and you can find plans that fit your budget and needs.
Finally, you can choose to go without health insurance coverage altogether. However, doing so will put you at risk of having to pay the penalty if you ever need medical care.
What to Do If You Can’t Afford Health Insurance
If you can’t afford health insurance, there are a few things you can do to avoid paying the penalty. First, if you’re eligible for government assistance, you can enroll in a health insurance plan through the Marketplace. Second, you may be able to get a hardship exemption from the penalty if you meet certain criteria. Finally, you can always apply for a health insurance subsidy to help offset the cost of your premium.
The Bottom Line
The Affordable Care Act’s individual mandate requires that most Americans have health insurance or pay a tax penalty. The tax penalty for not having health insurance was created to encourage people to get coverage and help pay for the care of those who do have insurance. The Congressional Budget Office estimates that 4 million people will pay the penalty in 2016.
The tax penalty is calculated two ways: as a percentage of your household income, or per person in your family. If you opt for the percentage-of-income approach, you’ll pay whichever is higher: 2.5% of your taxable income above the filing threshold, or $695 per uninsured adult and $347.50 per child under 18 (the maximum is capped at $2,085). For example, if your family makes $60,000 and you have two kids, you’d owe 2.5% of $10,000 (the amount over the $50,000 filing threshold), or $250. But because that’s less than the per-person penalties ($695 + $347.50 = $1,042.50), you’d end up paying that amount instead.
