Obamacare sure is a hot subject these days, particularly with its faltering website and a constant stream of congressional opposition. More than anything, we are finding that an overwhelming number of Americans are uniformed or confused about the upcoming penalty for the uninsured.
Here at Joyce, Jackman & Bell Insurors, we want you to know what to expect (for now, at least) as the Affordable Care Act moves forward.
There are exceptions to the individual mandate.
Contrary to what you might have heard, not everyone is required to purchase health insurance. If you are incarcerated, an undocumented immigrant, member of an American Indian tribe, or oppose healthcare for religious reasons, you will not be forced to buy coverage.
If premiums are more than 8% of your annual income, it will be considered an economic hardship and you will not have to obtain health care insurance.
The penalty increases over time.
Starting in 2014, there will be a penalty assessed to anyone subject to the individual mandate that does not purchase health insurance. The penalty for 2014 will be $95 per adult, but will increase to $695 by 2016. Please note however, that those of you with a higher income will be subject to a higher penalty.
The penalty will be withheld from your federal income tax return.
There is a three-month grace period before you will be liable for the penalty. Your penalty may also be prorated if you carry coverage at any point in the year.
Not all plans qualify.
To avoid the tax penalty you must purchase a plan that provides “minimum essential coverage.” Any plan you purchase in the health insurance marketplace will include the required benefits (bronze/silver/gold level), but be aware that “catastrophic” plans do not.
The penalty is only one cost of being uninsured.
Some of you may end up deciding to forego health insurance and will just take the penalty. If that is the case, then please bear in mind that the average out-of-pocket expense for healthcare is nearly $1,000 per capita each year.
Contact one of our agents at JJB for more information on health insurance.
Source – 5 Steps to Understanding Obamacare’s Penalty for the Uninsured
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