What is my penalty if I don't have health insurance?

The Affordable Care Act requires you to have health insurance if you are a U.S. citizen or legal resident. Exemptions are allowed for:
  • Financial hardship
  • Religious objections
  • American Indians
  • Those uninsured for less than three months
  • Undocumented immigrants
  • Incarcerated individuals
  • Those with incomes below the tax filing threshold
  • Those for whom the lowest cost plan option exceeds 8% of income
To determine whether you are exempt for this last reason:
  1. Find the annual premium for one of the lowest-quality plans in a state exchange;
  2. Figure how much Premium Tax Credit you would qualify for;
  3. Subtract the credit from the premiums amount;
  4. And divide the resulting number—your out-of-pocket expense—by your family's modified adjusted gross income.
If the result is more than .08, you would be exempt from a penalty for not buying health insurance.

The penalty is incurred for any month you are uninsured, but you may be uninsured for up to three months without penalty. The annual penalty is capped at an amount roughly equal to the cost of the national average premium for a qualified health plan — in other words, what it would have cost to buy insurance in the first place. The calculator assumes being without insurance for a full year.

If you owe a penalty, you'll pay it as a tax liability on your federal tax return. The penalty is enforced by the Treasury, but if you fail to pay the penalty, you will not be subject to criminal penalties, liens or levies.

Projected Annual Penalty for Being Uninsured
            2014
Annual penalty: $95 per adult + $47.50 per child, up to $285 or 1% of income, whichever is greater.
            2015
Annual penalty: $325 per adult + $162.50 per child, up to $975 or 2% of income, whichever is greater.
            2016
Annual penalty: $695 per adult + $347.50 per child, up to $2,085 or 2.5% of income, whichever is greater.
Number of adults in family
Number of children in family
Your family income
Your tax filing status

This information may help you analyze your financial needs. It is based on information and assumptions provided by you regarding your goals, expectations and financial situation. The calculations do not infer that the company assumes any fiduciary duties. The calculations provided should not be construed as financial, legal or tax advice. In addition, such information should not be relied upon as the only source of information. This information is supplied from sources we believe to be reliable but we cannot guarantee its accuracy. Hypothetical illustrations may provide historical or current performance information. Past performance does not guarantee nor indicate future results.

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