How Much Will the Health Insurance Penalty Cost You?
Before making purchase of health insurance plan, one should learn about all aspects of insurance such as penalty, amount of insurance coverage and payment of penalty when non-payment of premium. Here are some situations where you should be careful. Here we will check minimum health insurance to avoid tax and calculating the health insurance penalty.
No Penalty Levied
If a person has health insurance which is provided by his employer and covered by Medicaid or Medicare or he has purchased it through a private provider, there is no reason to worry. If a person can’t afford health insurance, there is no need to pay penalty. But if a person can afford health insurance and still refuse to buy it, he only will responsible for payment of health care expense as well as a penalty to internal revenue service.
Amount of Penalty
In year 2014, the amount of penalty is $95 per adult and $47.50 per child with a maximum of $285 per household or 1 percent of income, whichever is greater. Here 1 percent of income is calculated based on adjusted gross income that exceeds standard deduction and personal exemption for income tax purpose.
Do the Math
For the years 2008 to 2012, the U.S. Census Bureau estimates household income in U.S. is $53046 and average household persons are 3. According to TurboTax’s penalty calculator, the maximum penalty for average American family is $330.46 per year.
Keep in mind deadline of health coverage
Keep regarding that open enrollment through the state government closes on March, 2014. Before this date, one should insured with health insurance. After this deadline, he will not be covered with health insurance coverage from the market until next open enrollment period. Next enrollment period is November, 2014 to 15 January, 2015. However, there are exceptions for qualifying life events such as moving to a new area which offers different plan options, or change in household income that affects eligibility for tax credits, or changes in family size due to marriage or the birth of a child.
If a person is uninsured, he will be penalized only for the months without coverage. If a person insured with health policy in some point during year and then also penalty is levied on him and paid, the amount of penalty will be withheld from his tax refund of 2014 with. If there is nonpayment, the IRS can withhold the amount from any future tax refunds, with an accrued interest of 3 percent per annum.
To encourage the enrollment, the annual penalty will increase to $325 per adult and $162.50 per child, with a maximum of $975 per family or 2 percent of Annual Gross Income exceeding deductions and exemptions for the year 2015.
More Related Queries:
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- Minimum health insurance to avoid tax
- Fine for no insurance
- Will I have to pay a penalty for not having health insurance in 2019?