Opting Out of Obamacare? Heres How Much It Will Cost You... Open enrollment for insurance plans under the Affordable Care Act begins on Nov. 15. Between then and Feb. 15, youll be able to enroll in a new health care plan, re-enroll in the one you picked for 2014, switch plans, and apply for subsidies, depending on your income. Crucially, as HealthCare.gov points out, If you dont enroll in a health plan by Feb.15, 2015, the only way you can get health insurance for 2015 through the Marketplace is if you qualify for a Special Enrollment Period. And unless you have other health coverage, enrolling in Obamacare is the only way you can avoid having to pay the governments fee for failing to secure health care coverage. Hold Up a Sec -- What Was That About a Fee? To ensure that insurers have enough healthy persons in the system, paying premiums and offsetting the cost of taking care of those who get sick, Obamacare requires that everyone either sign up for health insurance -- or pay a fee (sometimes referred to as a tax or even a penalty) to opt out. And the fee the government requires you to pay in 2015 for not signing up for insurance may be double or even triple what it was in 2014 during the slow ramp-up of the Affordable Care Act. Theres a long list of exceptions. For example, if you meet the governments definition of being too poor to afford even Obamacare -- no penalty. If youre an American Indian -- no penalty. Or if youre in jail -- no penalty. (This is what we call a mixed blessing.) Crunching the Numbers Those exceptions aside, in 2014, the first year in which fees were charged for opting out of Obamacare, opt-outers were required to pay either $95 per person or 1 percent of their income above a certain threshold. Whichever number worked out to be greater was the one you paid for forgoing health care insurance. In 2015, these fees jump to the greater of either $325 or 2 percent of income over the filing threshold. And thats just if youre single. If you have a family to provide for -- and insure -- then forgoing Obamacare could cost you as much as $975 (or 2 percent of income over the threshold). And in 2016, the numbers will jump again. Individuals will pay $695 (or 2.5 percent of income) for opting out of health insurance coverage. Families will pay up to $2,085 or 2.5 percent. Result: If you didnt pay attention to the Obamacare debate last year, this year its more important than ever to study the math on whether you can afford to opt out. Unfortunately, the numbers can quickly get tricky. For example, you probably noticed mentions of a threshold above, right? Well, theres not just one threshold, but 10 that could apply to you, depending on your filing status and age. So your penalty can vary based on whether you are a single tax filer, a married couple filing jointly, a married couple filing separately, etc. dailyfinance/on/obamacare-opting-out-penalty-2015/
Posted on: Sun, 25 Jan 2015 01:12:36 +0000
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