Obamacare Penalties A law without consequences is like a Chihuahua without teeth. It may bite you, but it probably won’t do much damage. Obamacare most certainly contains teeth and for those who don’t comply, and fail to obtain an exemption, penalties will be imposed. The following table contains the tax penalties or what proponents prefer to call a “shared responsibility fee.” Beginning in 2014, absent a qualified exemption, you will be required to obtain health insurance. If you fail to comply, you will be subject to a penalty of 1.0% of your annual income or $95.00, whichever is greater. In 2015, the penalty increases to the greater of 2.0% of annual income or $325 per person. The following year it becomes the greater of 2.5% of income or $695 per person. After 2016, it will be indexed to the cost of living. It should also be noted that the maximum penalty is capped at three times the per person penalty. For example, if you earn $28,500 in 2014, 1.0% of your income would equal $285. Therefore, if you earn more than this, your maximum penalty would remain the same. All penalties will be due and payable with your annual federal income tax return. Hence, the penalty for 2014 would be due by April 15, 2015 and the IRS will be the collection agency used. Certain individuals will be exempt from Obamacare. According to the website, healthcare.gov, you may qualify for an exemption if: You’re uninsured for less than 3 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; 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; and You’re not lawfully present in the U.S. It should also be noted that if your income is less than 133% of the federal poverty level, you will be relieved of this penalty. At first blush, the exemptions seem to focus on the poor, those in prison, Native Americans, and illegal immigrants. There is, however, another list of qualified exemptions.
Posted on: Mon, 05 Jan 2015 17:09:22 +0000
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