Do you currently have health insurance? If you do not, beware, because sanctions 
to be uninsured are rising. As part of the Affordable Care Act (ACA), most Americans are required to have health insurance or pay a tax penalty if they do not. The sanctions were introduced in 2014 and have increased each year with 2016 being the last year of the phase-in period.
A recent study Kaiser Family Foundation (KFF), the average penalty individual mandate will increase by 47 percent in 2016 to the uninsured eligible for ACA plans. This article covers the who, what and why of the individual mandate penalty in 2016, and what to do if you do not currently have health insurance.
Who is subject to the individual mandate?
Basically, all Americans (children too) are required to have a minimum essential health insurance coverage and taxed in the form of individual mandate penalty if they do not.
Some people are exempt from the penalty, including undocumented immigrants, those whose incomes are so low that they are not required to file taxes, people with income below 138% of federal poverty level in states that did not increase Medicaid, people who have to pay more than 8% of household income for the cost of insurance plan bronze lowest, and those who belong certain groups or face a particular difficulty.
What is the punishment in 2016
The penalty for 2016 is calculated as the greater of two amounts :?
- A lump sum equal to $ 695 per adult and $ 347.50 per child to a maximum of $ 2,085 for the family.
- 2.5% of family income in excess of 2015 production thresholds tax income ($ 10,300 for a single person and $ 20,0 for a family).
penalty is prorated for people who are uninsured for part of the year and has given to people who have gap in coverage that lasts less than three consecutive months of the year.
KFF estimates that the average penalty paid to the uninsured in 2016, based on the current fines will be $ 969 per household.
Source: Foundation Kaiser Family
The penalty is assessed every year at tax time when you are prompted to enter information about your coverage (or your exemption ) on your tax return. If you have maintained coverage for 9 consecutive months or more, then you will satisfy the individual mandate. If you need to pay the tax, then you will be prompted to do so when filing your return.
Why are the individual mandate?
The short answer is to create price stability in the individual health insurance market. Much of the ACA was to establish, for the first time, guaranteed-issue individual health plans. This means that the healthy and the sick, as well, can buy the same policy. To avoid a world where only people with medical conditions buy health insurance, the ACA has designed a way to ensure that healthy people also entered the risk pool: the individual mandate.
Options for the currently uninsured
The best way to get individual health insurance is during open enrollment. The next registration opening dates are scheduled for October 15, 2016 - December 7, 2016. If you are looking for coverage outside of the open enrollment period, then you will need to qualify for a special enrollment period.
The most special enrollment periods give you 60 days before and after the qualifying event to be included in an individual health insurance policy. qualifying events include loss of the current health insurance, the change in family size, permanent relocation, termination of COBRA coverage, and change eligibility for premium tax credits.
Conclusion
2016 marks the year in which the individual mandate comes into full effect. It is a tax device used to promote: 1) obtain insurance coverage, and 2) participation to trade the market. Most Americans are subject to the individual mandate and will be fined if they do not receive coverage for 9+ months a year.
Interestingly, at the end of the analysis of the Kaiser Family Foundation, they report that for many people, pay the fine is cheaper than paying for insurance (even if it is While you get the zero value for the money you spend on the sentence). KFF found that nearly 11 million uninsured people are eligible to enter on market coverage, 3.5 million would pay $ 0 in monthly premiums for their eligibility for tax credits of premium, and 7.1 million would pay less for a penalty they would to buy the cheapest insurance available to them.
What questions do you have about how the individual mandate or the penalty is assessed? Let us know in the comments below and we will get back to you.
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