If you can afford, but don't have, health insurance according to the requirements of the Affordable Care Act (Obamacare), get ready to dig into your pocket -- and deeper next year -- to pay the penalty for not complying with the law. April 15 - Tax Day – is only about a month-and-a-half away. It's then that Americans must declare in their tax filings whether they had health insurance or some other approved health cost support method for tax year 2015, and pay up if they didn't. About one of every 14 Tennesseans doesn't have health insurance, or approximately 30,000 residents just of Knox County.
Label it a fee, a fine, penalty, or individual mandate (the government website healthcare.gov says it's called all of those), but whatever it's termed, it's money. There are people under the mistaken impression that the penalty only applies if someone is without legally eligible health cost support for an entire year. Not so. The penalty applies to every month a person or their dependents fail to comply with the law.
There are two ways to calculate the penalty, either per-person or as a percentage of household income, whichever will cost you more.
The household income calculation is a minimum of 2.5 percent of household income up to a maximum amount totaling, as healthcare.gov says, the "yearly annual premium for the national average price of a Bronze plan sold through the marketplace."
The per-person penalty for lack of what is termed "minimal essential coverage" this year is $325 or 2 percent of income, whichever is higher. Tax year 2016 will see the penalty jump for individuals to $695 or 2.5 percent of income. For families in 2016, the increase is from $975 or 2 percent of income to $2,085 or 2.5 percent of income, whichever is greater.
There is a considerable list of exemptions to the Obamacare penalty. Among them are these:
• A member of a recognized religious group with objections to insurance.
• The lowest-priced plan would cost more than 8.05 percent of your household income.
• Your income is below the requirement to file a tax return.
• Tennessee hasn't expanded Medicaid, but you would have qualified for the exemption if Medicaid had been expanded.
• You went uninsured for only two consecutive months during the year.
• You're a member of a health care sharing ministry certified by the Department of Health & Human Services.
• You have a hardship that qualifies, according to an approved list.
• You're in jail.
Obamacare was signed into law in 2010. The bugs, kinks, and costs are still being worked out, dealt with, and debated. There are reporting obligations and administrative issues that businesses and individuals alike sometimes find challenging.
For individuals, navigating the complexities of the law's mandates, conditions, and costs can be perplexing. There are websites available to help people work their way through the maze.
This site enables a calculation of how much will be owed in penalties: https://www.healthcare.gov/fees/fee-for-not-being-covered/.
Health coverage exemption information and how to determine if you're eligible is at this site: https://www.healthcare.gov/health-coverage-exemptions/forms-how-to-apply/.
Love or loathe Obamacare, the law is the law, and April 15 approaches, inexorably.
Next month we'll explore, as Tax Day draws even closer, Obamacare-related issues for businesses.
You may view the original article from the Knoxville News Sentinel here.