Individual Penalties • September, 2014

Buy health insurance, or pay a penalty – Starting in 2014, the government required all citizens (with a few exceptions) to have insurance coverage. If you don’t, you’ll pay an additional tax when you file your tax return. Of course there are some exceptions…..

The Annual Penalty
Beginning with the filing of 2014 taxes, most people without medical coverage will need to pay a penalty to the Federal government. The penalty, which is really a tax, would be paid when you file your 2014 taxes in early 2015. And it’ll increase every year.

As shown in the chart below, there are two ways to calculate it, and you’ll pay the higher of these two amounts. There is an additional cap on this tax; it cannot be more than the National average premium for Bronze coverage. The cap for 2014 is $2448 per person (we know this will be at least double in 2015).

penalty-graog

The penalties above represent the annual tax. If you go without coverage during part of the year, you will only need to pay a portion of the penalty.

Medical Coverage
As long as you and your dependents have a medical plan through one of the following sources, you will be considered “covered” and won’t need to pay the individual penalty.

  • Medicare
  • Medicaid
  • Children’s Health Insurance Program
  • Tricare or other Veterans coverage
  • A plan through an employer
  • Individual coverage you buy for yourself

Those Exempt from the Tax Penalty
The government will waive the penalty for the following people:

  • Those who cannot afford coverage (if it would cost more than 8% of your household income)
  • Those with religious objections
  • American Indians covered by Indian Health Services
  • Undocumented immigrants
  • Anyone in prison
  • Those who make too little to file a tax return
  • Anyone who goes without coverage for less than three months during the calendar year

A Common Question
If I am employed, will my employer have to offer me medical insurance?
No. The new law does not require employers to provide medical coverage. It only requires you as an individual to have medical coverage for you and your family.

This article is provided for informational purposes only. Please contact your attorney and/or accountant to determine if this information may affect your business. © 2015 GHB Insurance

© 2011 - 2018 Copyright - GHB Insurance