It's officially March which means individuals without health insurance have until the 31st to sign up for Obamacare or face a fine. March 31 is when open enrollment for 2014 ends according to healthcare.gov. Individuals who don't sign up for Obamacare or some form of health plan by the end of the month are subject to a fine while employers and big companies have been given a delay by the Obama administration.
If someone who can afford health insurance doesn’t have coverage in 2014, they may have to pay a [fine]. They also have to pay for all of their health care.
The fine is sometimes called the "penalty," "individual responsibility payment," or "individual mandate."
The penalty in 2014 is calculated one of 2 ways. You’ll pay whichever of these amounts is higher:
-1% of your yearly household income. (Only the amount of income above the tax filing threshold, $10,150 for an individual, is used to calculate the penalty.) The maximum penalty is the national average yearly premium for a bronze plan.
-$95 per person for the year ($47.50 per child under 18). The maximum penalty per family using this method is $285.
The way the penalty is calculated, a single adult with household income below $19,650 would pay the $95 flat rate. A single adult with household income above $19,650 would pay an amount based on the 1 percent rate. (If income is below $10,150, no penalty is owed.)
The penalty increases every year. In 2015 it’s 2% of income or $325 per person. In 2016 and later years it’s 2.5% of income or $695 per person. After that it's adjusted for inflation.
If you’re uninsured for just part of the year, 1/12 of the yearly penalty applies to each month you’re uninsured. If you’re uninsured for less than 3 months, you don’t have to make a payment.
Where does the fine come from? The IRS of course. Last week the IRS released a list of Obamacare "Heathcare Tax Tips" reminding people to be sure to submit their health insurance status along with their tax returns.
Here's another friendly reminder: Even with Obamacare and a massive overhaul of our health system, 30 million out of the 45 million uninsured will remain uninsured. Before Obamacare was passed, 80 percent of Americans already had health insurance either through their employer or through the individual marketplace. As Kevin detailed yesterday, Obamacare enrollment numbers are lagging far behind Obama administration hopes and estimates.