Obamacare Penalties Double for Uninsured in 2016

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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.

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.

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50 Ways to Save on Health Care

“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.

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.