Are you one of the millions of Americans without health insurance? While it might seem like a smart financial move in the short term, going without coverage can result in hefty fines and unexpected medical bills. In this post, we’ll dive into what exactly the fine for no health insurance entails and what steps you can take to avoid paying it. So buckle up and let’s get started!
The Affordable Care Act
The Affordable Care Act (ACA) is a federal law that requires all Americans to have health insurance. If you don’t have health insurance, you must pay a fine. The fine for not having health insurance is called the individual shared responsibility payment.
The amount of the individual shared responsibility payment depends on your income and family size. For example, in 2016, the payment is 2.5% of your yearly income or $695 per adult and $347.50 per child under 18, whichever is higher. The maximum payment is $2,085 per family.
You usually have to make the individual shared responsibility payment when you file your federal tax return. But there are some exceptions. For example, if you’re unemployed or can’t afford health insurance, you may qualify for an exemption from the payment.
If you don’t have health insurance and don’t qualify for an exemption, you’ll have to pay the individual shared responsibility payment when you file your taxes.
The Individual Mandate
The Affordable Care Act (ACA) requires that most individuals must have health insurance or pay a penalty. This is sometimes called the individual mandate. The ACA’s individual mandate went into effect in 2014.
The penalty for not having health insurance is sometimes called the individual shared responsibility payment. You may owe this payment if you don’t have qualifying health coverage for part or all of a year and you’re not exempt from the requirement to have coverage.
If you can afford health insurance but choose not to buy it, you’ll generally have to pay a fee of 2.5% of your yearly household income or $695 per person ($347.50 per child under 18). The fee increases every year. In 2016, the fee is 2.5% of income or $695 per person ($347.50 per child under 18). In 2017, it’s scheduled to be 2.5% of income or $695 per person ($347.50 per child under 18).
You pay the fee on your federal tax return for the year you don’t have coverage. For example, if you didn’t have coverage in 2016, you’ll pay when you file your 2016 tax return in early 2017. The fee is calculated based on your income and how many people in your household didn’t have qualifying health coverage (sometimes called minimum essential coverage).
The Penalty for Not Having Health Insurance
If you can afford health insurance but choose not to buy it, you must pay a fee called the individual shared responsibility payment. The fee is sometimes called the “health insurance penalty.” You pay the fee when you file your federal tax return for the year you don’t have coverage.
The fee for not having health insurance in 2018 is 2.5% of your yearly household income or $695 per person ($347.50 per child under 18), whichever is higher.
You’ll owe 1/12 of the annual fee for each month you or your family are uninsured. For example, if your family doesn’t have health insurance for just 6 months out of the year, you still must pay half of the annual fee for that year.
The fee increases every year. In 2019, it goes up to 2.9% of your yearly household income or $739 per person ($369.50 per child under 18).
The good news is that there are many exemptions to the fee. You won’t have to pay the fee if:
-You don’t have to file a tax return because your income is too low (for example, if you’re single and make less than $10,000)
-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 religious
How the Penalty is Calculated
The fine for not having health insurance is calculated as a percentage of your annual income or a flat fee, whichever is greater. The percentage for 2019 is 2.5% of your annual income, and the flat fee is $695 per adult and $347.50 per child under 18. The maximum fine per family using this method is $2,085.
Exemptions to the Penalty
There are a few exemptions to the penalty for not having health insurance. If you have a hardship that prevents you from getting coverage, you may be exempt. You may also be exempt if you’re a member of a native American tribe or if you’re incarcerated.
How to Pay the Penalty
If you don’t have health insurance, you may have to pay a fee called the individual shared responsibility payment. The amount of this payment may change each year.
For 2016, the fee is 2.5% of your yearly household income or $695 per person ($347.50 per child under 18), whichever is higher.
You’ll owe the higher amount if you make more money or have more people in your family. You only pay the fee for any months during the year when you (or your dependents) don’t have qualifying health coverage or an exemption.
You usually make this payment with your tax return when you file for the year. If you didn’t have coverage or an exemption and already filed your taxes, you can still make a payment by mailing a check to the address listed on your notice or by paying online at IRS.gov/payments.
If you had qualifying health coverage for some or all of the year but are unsure whether you reported it to the Marketplace, see questions 10 and 11 about health care information included on Form 1040.
Conclusion
It is clear from the information provided that having health insurance is an important financial safeguard for individuals and families. With no health insurance, you may be subject to a hefty fine if you are unable to pay for medical care or do not qualify for government assistance programs.
To avoid this penalty, it’s essential to have appropriate health coverage in place so you can access quality care when needed. Take some time to review your options and find a plan that works best for your budget and needs.
