Although Open Enrollment officially ended on March 31, 2014, there are still many uninsured Americans. If you remain uninsured you’ll now have to pay a penalty–either 1% of their yearly household income or $95 per person ($47.50 per child under 18). How do you know which one you should pay? If your annual income is below $19,650, you would be responsible for paying the $95. If your annual income is above $19,650, you would pay 1% of your income. You would NOT have to pay a penalty if your income falls below $10,150.
You should know that the penalty will increase every year. For example, next year, it will be 2%of your yearly income or $325 per person. If you’re uninsured for only part of the year, you would have to pay 1/12 of the annual penalty for each month you’re uninsured (unless it’s less than 3 months, in which case you would not have to make any payment). You’ll be required to pay the penalty on your 2014 federal income tax return.
“To avoid the penalty you need insurance that qualifies as minimal essential coverage. If you’re covered by any of the following, you’re considered covered and don’t have to pay a penalty:
- Any Marketplace plan, or any individual insurance plan you already have
- Any employer plan (including COBRA, with or without “grandfathered” status. This includes retiree plans
- The Children’s Health Insurance Program (CHIP)
- TRICARE (for current service members and military retirees, their families, and survivors)
- Veterans health care programs (including the Veterans Health Care Program, VA Civilian Health and Medical Program (CHAMPVA), and Spina Bifida Health Care Benefits Program)
- Peace Corps Volunteer plans
- Self-funded health coverage offered to students by universities for plan or policy years that begin on or before Dec. 31, 2014
Other plans may also qualify. Ask your health coverage provider.
Health plans that don’t qualify as coverage–
Health plans that don’t meet minimum essential coverage don’t qualify as coverage in 2014. If you have only these types of coverage, you may have to pay the fee. Examples include:
- Coverage only for vision care or dental care
- Workers’ compensation
- Coverage only for a specific disease or condition
- Plans that offer only discounts on medical services”
Remember, just because you pay a penalty does NOT mean you are insured. Speak to a qualified insurance broker to explore your options for health insurance and get covered now!
Tiffany Buczek is a freelance writer and licensed esthetician living in Southern CA.