The answer to whether you will be taxed if you don't have health insurance is no and yes. No you won't be taxed, but you will have to pay a penalty. The penalty is called a "fee". The fee is $95 per person, or 1% of your household income up to the national average of a bronze level plan.
President Obama promised not to raise taxes to fund the Affordable Care Act. The Supreme Court ruled that the federal government could not impose a penalty on people not purchasing a policy, but could impose a tax. The IRS is charged with collecting the "fee" that is neither a penalty or a tax.
That is a great question! While you won't be taxed per se, you will have to pay a penalty for not having it. The penalty is $95, or 1% of your household income, and increases each year. The purpose behind the penalty is to get more people to enroll, and thus assume more responsibility for their health care. too many uninsured people were having their health care paid for by the rest of us, in the form of higher costs. Thanks for asking!
Yes, No and Maybe. Now, are we all clear on that? The simple version of things is that failure to comply with the individual mandate will trigger a penalty for an adult of $95 or 1% of Adjusted Gross Income (whichever is greater). And, if the average citizen knows anything at all about ObamaCare then this is probably the piece they know about.
As with so many aspects of ObamaCare, when one gets down into the details the picture gets less clear. First, there were certain groups excluded from ObamaCare and the individual mandate from the law's very beginning (members of certain faiths such as the Amish, people enrolled in health care sharing ministries and Native Americans are prominent examples). You are also exempted from the individual mandate penalty if the lowest cost marketplace option in your area is more than 8% of your family income or you fall below the tax filing threshold.
As the law has continued to "evolve" there has been a new class of exemptions granted by the IRS for "hardship" exemptions. This IRS form provides 14 different hardship exemptions a taxpayer can claim to avoid paying the individual mandate penalty. Some are rather narrowly constructed and have an obvious logic to them, the exemption for being homeless for example. Others, are worded in ways that can leave a lot of room for creativity. Some of my favorite hardship exemptions are;
1) You received a shut off notice from your utility company. (So, don't pay your gas bill for a couple of months, get a shutoff notice then pay your bill, and you qualify for a health penalty waiver - can anybody foresee lots of people having "cash flow" problems on their utility bills in the years to come?)
2) You experienced the death of a close family member. (Yep, that's it. Doesn't really define the time line, what "experienced" truly means, what does "close" mean and how far out on the family tree can you go and still say someone was a family member. The potential for creativity in this area is hilarious to anticipate.)
4) Your individual plan is cancelled and you believe other marketplace plans are unaffordable. (When it comes to belief, do any of us really believe that health insurance is affordable? What is my belief predicated on? Will my belief be viewed differently if I am a Tea Party donor or a supporter of the Occupy movement?)
5) You experienced another hardship in obtaining health insurance. (I agree that brevity is the soul of wit but this may take things to the extreme. What's a hardship to one person is an inconvenience to another. Dust off your creative writing skills, I can foresee lots of tales of woe about losing your dog of 15 years (hey, the dog meant more to me than some close relatives), that you only have dial-up internet, why the mind runs wild with the possibilities!
So, will you be penalized on your 2014 taxes in 2015 if you don't have acceptable health insurance. Technically, yes. In practical terms, many people will be able to claim an exemption and that will significantly dilute the anticipated revenue stream (and the government has already included individual mandate tax penalties in its cost projections for ObamaCare) from and the practical effect of the individual mandate on people's behavior.
In many ways you will have to be almost actively seeking out the opportunity to pay the tax penalty or be in that place in life where you are getting by financially without a health insurance payment and not much of anything that could smack of a hardship occurs in your life. For a lot of other people, some life circumstances during many years of their lives will let them take a pass on the penalty. You can bet the tax preparation services are going to be going great guns on this, they've already started trying to help people enroll. It's only logical to extend that to making sure every hardship their client is entitled to is reported.
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President Obama promised not to raise taxes to fund the Affordable Care Act. The Supreme Court ruled that the federal government could not impose a penalty on people not purchasing a policy, but could impose a tax. The IRS is charged with collecting the "fee" that is neither a penalty or a tax.
As with so many aspects of ObamaCare, when one gets down into the details the picture gets less clear. First, there were certain groups excluded from ObamaCare and the individual mandate from the law's very beginning (members of certain faiths such as the Amish, people enrolled in health care sharing ministries and Native Americans are prominent examples). You are also exempted from the individual mandate penalty if the lowest cost marketplace option in your area is more than 8% of your family income or you fall below the tax filing threshold.
As the law has continued to "evolve" there has been a new class of exemptions granted by the IRS for "hardship" exemptions. This IRS form provides 14 different hardship exemptions a taxpayer can claim to avoid paying the individual mandate penalty. Some are rather narrowly constructed and have an obvious logic to them, the exemption for being homeless for example. Others, are worded in ways that can leave a lot of room for creativity. Some of my favorite hardship exemptions are;
1) You received a shut off notice from your utility company. (So, don't pay your gas bill for a couple of months, get a shutoff notice then pay your bill, and you qualify for a health penalty waiver - can anybody foresee lots of people having "cash flow" problems on their utility bills in the years to come?)
2) You experienced the death of a close family member. (Yep, that's it. Doesn't really define the time line, what "experienced" truly means, what does "close" mean and how far out on the family tree can you go and still say someone was a family member. The potential for creativity in this area is hilarious to anticipate.)
4) Your individual plan is cancelled and you believe other marketplace plans are unaffordable. (When it comes to belief, do any of us really believe that health insurance is affordable? What is my belief predicated on? Will my belief be viewed differently if I am a Tea Party donor or a supporter of the Occupy movement?)
5) You experienced another hardship in obtaining health insurance. (I agree that brevity is the soul of wit but this may take things to the extreme. What's a hardship to one person is an inconvenience to another. Dust off your creative writing skills, I can foresee lots of tales of woe about losing your dog of 15 years (hey, the dog meant more to me than some close relatives), that you only have dial-up internet, why the mind runs wild with the possibilities!
So, will you be penalized on your 2014 taxes in 2015 if you don't have acceptable health insurance. Technically, yes. In practical terms, many people will be able to claim an exemption and that will significantly dilute the anticipated revenue stream (and the government has already included individual mandate tax penalties in its cost projections for ObamaCare) from and the practical effect of the individual mandate on people's behavior.
In many ways you will have to be almost actively seeking out the opportunity to pay the tax penalty or be in that place in life where you are getting by financially without a health insurance payment and not much of anything that could smack of a hardship occurs in your life. For a lot of other people, some life circumstances during many years of their lives will let them take a pass on the penalty. You can bet the tax preparation services are going to be going great guns on this, they've already started trying to help people enroll. It's only logical to extend that to making sure every hardship their client is entitled to is reported.