What is the penalty for not having insurance under Obamacare?
- Penalty for not having health insurance
If you don’t qualify for an exemption to the Affordable Care Act’s mandate to purchase qualifying health coverage, then you will be subject to a tax penalty.
The penalty is phased-in over a three year period.
In 2014, the penalty will be the greater of 1.0% of taxable income or $95 per adult and $47.50 per child (up to $285 per family).
In 2015, the penalty will be the greater of 2.0% of taxable income or $325 per adult and $162.50 per child (up to $975 per family).
In 2016, the penalty will be at the greater of 2.5% of taxable income or $695 per adult and $347.50 per child (up to $$2,085 per family).
After 2016, the penalty will be increased annually by the increase to the cost-of-living.
Households with incomes above 400% of FPL will be exempt from paying tax penalties if insurance in their area costs more than 8% of their taxable income, after taking into account employer contributions or tax credits.
People will be able to apply for exemptions to the tax penalty if:
- they have financial hardships,
- religious objections,
- if they’re an American Indian,
- if they’re uninsured for less than three months,
- if they’re an undocumented immigrant,
- if they’re incarcerated.