Obamacare

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ObamaCare’s individual mandate requires that most Americans obtain health insurance by 2014 or pay a tax penalty. The individual mandate goes into effect January 1st, 2014. The penalty will be applied to your year-end federal modified adjusted gross income for each month you don’t have health insurance or an exemption. Luckily all Americans will qualify for an exemption allowing them to enroll anytime before March 31st, 2014 in a marketplace plan.

To avoid the penalty you must enroll in a marketplace plan no later than March 31st, 2014. Remember open enrollment ends March 31st, 2014 so if you miss the deadline you won’t just owe a fee, you’ll have to wait until the marketplace opens again on Novemeber 15th, 2014.

Coverage Gap Exemptions and Deadlines for ObamaCare Individual Mandate

Although the mandate started January 1st, 2014 you have a 3 month grace period, due to a “short coverage gap” exemption, allowing you less than 3 months in a row without coverage in 2014 (this covers Janurary through March).

There is another coverage gap exemption that applies to those who purchase marketplace insurance between March 15th and March 31st, 2014 (this covers April since your coverage won’t start until May 1st, 2014.) See below for more details on exemptions.

How Much is the Penalty for Not Having Insurance?

The fee for not having insurance in 2014 is $95 per adult and $47.50 per child (up to $285 for a family) or 1% of your taxable income, whichever is greater. See the “How the ObamaCare Tax Penalty Works” section below for important details as the specifics of the law or more complicated than that.

NOTE: The maximum penalty cannot exceed the national average yearly premium for a bronze plan.

The mandate to have insurance for 2014 is sometimes referred to as the ObamaCare tax penalty, the individual mandate or individual shared responsibility fee. These are all the same thing. If you are looking for information on the

What is ObamaCare’s Individual Mandate?

One of the key parts of “ObamaCare” is the individual mandate. Originally purposed by the Heritage Foundation in 1989, the individual mandate requires that all eligible Americans have at least basic health coverage.

The individual mandate is officially part of the shared responsibly provision and is called a individual shared responsibility fee. The fee works like this: if you don’t have insurance by January 31st, 2014 or obtain an exemption, you get charged a fee for every month you don’t have insurance on your year-endMAGI taxable income. If you have coverage for at least one day in that taxable year then you don’t owe the payment for that month.

Check out the official IRS website on exemptions and the Individual mandatefor additional details.

The Latest Date You Can Sign Up For ObamaCare

The latest date to sign up for ObamaCare, without a special hardship exemption, is March 31st, 2014 (please note you must actually enroll in a plan by March 31st, 2014 not just sign up for the site!). However, this sign-up date relies on some exemptions which are explained in detail below.

If you enroll in a health insurance plan through the Marketplace by March 31, 2014, you won’t have to make the payment for any month before your coverage began.

For example, if you enroll in a Marketplace plan on March 31 your coverage begins on May 1. If you didn’t have coverage earlier in the year, you won’t have to pay a penalty for any of the previous months of 2014.

Marketplace coverage always starts on the first day of a month, and to qualify you must have enrolled by the 15th day of the previous month. So those enrolling in a marketplace plan after February 15th 2014 will not be covered in March but have to wait until April 1st.

Find your your state’s health insurance marketplace.

How the ObamaCare Tax Penalty Works

Your tax penalty (shared responsibility fee) for not having insurance is paid on your federal income taxes at the end of the year. If your taxable income is below 133% of the federal poverty level you are exempt from this tax.

2014 = $95 per person per year or 1% of your Income
2015 = $325 per person per year or 2% of your Income
2016 = $695 per person per year or 2.5% of your Income
2017 = Tax Penalty will increase by the rate of inflation going forward, or 2.5% of your Income

• If you’re uninsured for just part of the year, 1/12 of the yearly penalty applies to each month you’re uninsured.

• The penalty is based on modified adjusted gross income and is paid on your federal income taxes.

• The total penalty for the taxable year cannot exceed the national average of the annual premiums of a bronze-level health insuranceplan offered through the health insurance marketplaces.

• The maximum penalty per family is capped at no more than 300% of the minimum penalty (e.g. $695 x 300% = $2,085).

• Children under 18 are assessed at 50% of the minimum penalty.

• The penalty is pro-rated for the number of months you are without health insurance, though there is no penalty for a single gap in coverage of less than 3 months in a year. 

• Health insurance plans will provide proof of coverage for their customers so as long as you have health insurance you don’t have to worry about the details.

State Health Insurance Marketplaces

Find your State’s OfficialHealth Insurance Marketplace. Apply today to compare health plans and see if you, your family, or your small business qualify for cost assistance

ObamaCare’s Individual Mandate: What is the Tax Penalty for Not Having Health Insurance?

ObamaCare’s individual mandate requires that most Americans obtain health insurance by 2014 or pay a tax penalty. The individual mandate goes into effect January 1st, 2014. The penalty will be applied to your year-end federal modified adjusted gross income for each month you don’t have health insurance or an exemption. Luckily all Americans will qualify for an exemption allowing them to enroll anytime before March 31st, 2014 in a marketplace plan.

To avoid the penalty you must enroll in a marketplace plan no later than March 31st, 2014. Remember open enrollment ends March 31st, 2014 so if you miss the deadline you won’t just owe a fee, you’ll have to wait until the marketplace opens again on Novemeber 15th, 2014.

Coverage Gap Exemptions and Deadlines for ObamaCare Individual Mandate

Although the mandate started January 1st, 2014 you have a 3 month grace period, due to a “short coverage gap” exemption, allowing you less than 3 months in a row without coverage in 2014 (this covers Janurary through March).

There is another coverage gap exemption that applies to those who purchase marketplace insurance between March 15th and March 31st, 2014 (this covers April since your coverage won’t start until May 1st, 2014.) See below for more details on exemptions.

How Much is the Penalty for Not Having Insurance?

The fee for not having insurance in 2014 is $95 per adult and $47.50 per child (up to $285 for a family) or 1% of your taxable income, whichever is greater. See the “How the ObamaCare Tax Penalty Works” section below for important details as the specifics of the law or more complicated than that.

NOTE: The maximum penalty cannot exceed the national average yearly premium for a bronze plan.

The mandate to have insurance for 2014 is sometimes referred to as the ObamaCare tax penalty, the individual mandate or individual shared responsibility fee. These are all the same thing. If you are looking for information on the employer shared responsibility fee (the one where employers have to cover full-time workers), please see our employer mandate page.

What is ObamaCare’s Individual Mandate

One of the key parts of “ObamaCare” is the individual mandate. Originally purposed by the Heritage Foundation in 1989, the individual mandate requires that all eligible Americans have at least basic health coverage.

The individual mandate is officially part of the shared responsibly provision and is called a individual shared responsibility fee. The fee works like this: if you don’t have insurance by January 31st, 2014 or obtain an exemption, you get charged a fee for every month you don’t have insurance on your year-endMAGI taxable income. If you have coverage for at least one day in that taxable year then you don’t owe the payment for that month.

Check out the official IRS website on exemptions and the Individual mandatefor additional details.

The Latest Date You Can Sign Up For ObamaCare

The latest date to sign up for ObamaCare, without a special hardship exemption, is March 31st, 2014 (please note you must actually enroll in a plan by March 31st, 2014 not just sign up for the site!). However, this sign-up date relies on some exemptions which are explained in detail below.

If you enroll in a health insurance plan through the Marketplace by March 31, 2014, you won’t have to make the payment for any month before your coverage began.

For example, if you enroll in a Marketplace plan on March 31 your coverage begins on May 1. If you didn’t have coverage earlier in the year, you won’t have to pay a penalty for any of the previous months of 2014.

Marketplace coverage always starts on the first day of a month, and to qualify you must have enrolled by the 15th day of the previous month. So those enrolling in a marketplace plan after February 15th 2014 will not be covered in March but have to wait until April 1st.

Find your your state’s health insurance marketplace.

How the ObamaCare Tax Penalty Works

Your tax penalty (shared responsibility fee) for not having insurance is paid on your federal income taxes at the end of the year. If your taxable income is below 133% of the federal poverty level you are exempt from this tax.

2014 = $95 per person per year or 1% of your Income
2015 = $325 per person per year or 2% of your Income
2016 = $695 per person per year or 2.5% of your Income
2017 = Tax Penalty will increase by the rate of inflation going forward, or 2.5% of your Income

• If you’re uninsured for just part of the year, 1/12 of the yearly penalty applies to each month you’re uninsured.

• The penalty is based on modified adjusted gross income and is paid on your federal income taxes.

• The total penalty for the taxable year cannot exceed the national average of the annual premiums of a bronze-level health insuranceplan offered through the health insurance marketplaces.

• The maximum penalty per family is capped at no more than 300% of the minimum penalty (e.g. $695 x 300% = $2,085).

• Children under 18 are assessed at 50% of the minimum penalty.

• The penalty is pro-rated for the number of months you are without health insurance, though there is no penalty for a single gap in coverage of less than 3 months in a year. 

• Health insurance plans will provide proof of coverage for their customers so as long as you have health insurance you don’t have to worry about the details.

What You Need to Know About the Individual Mandate!!

There are a few things that every American should know about ObamaCare’s individual mandate:

• Insurance must be obtained by January 2014 to avoid the fee. (Please note: Due to exemptions you can enroll in marketplace insurancebefore March 31st, 2014 and still avoid the fee.)

• The fee is based off of the number of months in a given year an individual is without “minimal essential coverage” or an exemption.

• If a buying a “silver plan” on the health insurance marketplace will cost you more than 8% of your family income, after subsidies, you are exempt from the mandate.

• You are allowed a short coverage gap of 3 consecutive months in a year and will be exempt from the fee for these months. In 2014 a second exemption covers those who buy marketplace insurance for an addtional month.

• Most employer based coverage, Medicare, Medicaid, CHIP, private insurance and all insurance purchased through your State’s marketplace count as minimal essential coverage.

• The requirement to obtain health coverage is essentially the trade Americans make for our new benefits, rights and protections including the requirement for insurers to cover anyone who can afford it.

• Those who choose to pay the tax help to subsidize the cost of health insurance purchased through the health insurance marketplace.

• ObamaCare makes insurance more affordable. Americans making under 400% of the federal poverty level may be able to obtain free or low-cost health insurance from their State’s Health Insurance Marketplace.

• The “mandate” to have insurance is officially a tax as declared by the supreme court on June 28, 2012.

• The individual mandate is technically called an “Individual Shared Responsibility Fee”

• The individual mandate and employer mandate are part of the “Shared Responsibility Provision”, one of the key provisions contained within the Affordable Care Act.

Jody K Young

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