Advertisement
insurance

Obamacare Penalties to Double for Uninsured in 2016

For those willing to live without health insurance, next year may be the tipping point at which your money is better spent on a policy than a penalty.

What is the penalty for not having health insurance? Will it be the same for 2016?

The penalty for not having health insurance in 2015 is $325 per adult and $162.50 per child under 18 (with a total family maximum of $975, regardless of family size), or 2% of your annual household income, whichever is higher. Only the amount of income above the tax-filing threshold (about $10,150 for an individual) counts toward the percentage calculation of the penalty.

Advertisement - Article continues below

In 2016, the penalty jumps to $695 per adult and $347.50 per child under 18 (with a family maximum of $2,085), or 2.5% of your annual household income above the tax-filing threshold, whichever is larger. (You pay the fee on the federal income tax return you file for the year you don’t have coverage.) See this fact sheet for more information about the calculations.

“We are approaching that tipping point for people who have sat out because they said they’d pay the penalty,” says Hector De La Torre, executive director of the Transamerica Center for Health Studies. “We saw this in Massachusetts, when the tax penalty went up. There was a tipping point at which people said they’d rather pay for health insurance and get something in return for their money.” Massachusetts was the first state to require people to purchase health insurance or else pay a penalty, and the size of the penalty gradually increased over the first few years.

You generally must wait until open enrollment in the fall to buy health insurance on your own (whether through a state exchange or directly from an agent or insurer), although there are some exceptions. You can buy coverage before then if you move or experience other “life changes,” such as getting married or divorced, having or adopting a baby, or losing other health insurance. You generally have 60 days from the date of the event to buy a new policy.

Open enrollment for individual health insurance runs from November 1 to January 31 for 2016 coverage. See the special enrollment-period page at www.healthcare.gov for more information about the rules and a screening tool to help you see if you qualify to buy coverage outside of open enrollment.

Advertisement
Advertisement

Most Popular

What Trump's Payroll Tax Cut Will Mean for You
Tax Breaks

What Trump's Payroll Tax Cut Will Mean for You

President Trump has issued an executive order to defer the collection of payroll taxes. How much will it save you?
August 9, 2020
What a Payroll Tax Cut Would Mean for You
Tax Breaks

What a Payroll Tax Cut Would Mean for You

If Congress can't pass another stimulus bill, President Trump says he will initiate a payroll tax cut by executive order. How much would that save you…
August 8, 2020
7 Surprisingly Valuable Assets for a Happy Retirement
happy retirement

7 Surprisingly Valuable Assets for a Happy Retirement

If you want a long and fulfilling retirement, you need more than money. Here are the most valuable retirement assets to have (besides money), and how …
August 3, 2020

Recommended

The Insurance Company Denied My Claim. What Should I Do?
insurance

The Insurance Company Denied My Claim. What Should I Do?

A lawyer specializing in insurance bad faith law explains why this happens, and outlines how to fight back.
August 6, 2020
Time for an Insurance Review
Coronavirus and Your Money

Time for an Insurance Review

You may need to update your policies in light of COVID-19.
July 30, 2020
Insurance Question: Say Rioters Destroy My Business, Am I Covered?
insurance

Insurance Question: Say Rioters Destroy My Business, Am I Covered?

If you ask your broker, the answer may be no. But don’t just accept that response. Know what your policy covers, and how to protect yourself.
July 29, 2020
HSAs Get Even Better
Financial Planning

HSAs Get Even Better

A health savings account is a powerful, tax-advantaged tool to cover out-of-pocket medical expenses and a smart way to save for medical expenses in re…
July 3, 2020