Health Insurance and its tax penalty/enroll by? (1 Viewer)

[Zow]

I don't have health insurance. Haven't for over a year and a half due to my current employer not offering it (and basically paying me a higher salary instead). Chose not to for the dual reason of a calculated risk (I haven't been to the doctor in years) and laziness.

I recognize now the Affordable Health Care Act requires it or there will be a tax penalty. However, I cannot find clear info anywhere. I've heard dates like 3/1/14, 3/31/14, and 4/1/14. But I cannot even figure out what the tax penalty would be for no insurance.

I've found some plans for like 200/month. That kinda blows, but it's doable. Any accountants or insurance agents here know anything about this? My questions are basically when should I enroll by and what's the tax hit for not. My combined household income is about 120k.

 

[jon_mx]

You have to enroll by March 31 and coverage must start before May 1.

 

[Zow]

You have to enroll by March 31 and coverage must start before May 1.

Did this change from an April 1st deadline originally?

 

[DocHolliday]

Ask Tim. He is the ACA expert.

 

[jon_mx]

The penalty is difficult to calculate. It can be as low as $95 or as high as $12,000 (if you are a family with an AGI of $1.2 million).

 

[Ignoramus]

Regardless of the pending penalties, you really should have at least a High Deductible Health Plan (HDHP) with an HSA in case of something catastrophic. My wife and I had one a couple of years ago through Blue Cross/Blue Shield that cost about $180/month for the two of us.

 

[jon_mx]

The best I can figure is the the basic calculation for the penalty is 1% of you AGI minus your standard deduction. But there are many factors that come into play.

 

[Zow]

Regardless of the pending penalties, you really should have at least a High Deductible Health Plan (HDHP) with an HSA in case of something catastrophic. My wife and I had one a couple of years ago through Blue Cross/Blue Shield that cost about $180/month for the two of us.

Yeah I agree. Problem is that I'm not finding much for under 200.

 

[Schlzm]

You shouldn't worry about it. Like many other parts of this thing I am sure the deadlines will be kicked down the road so you can keep on rolling coverage free but safe in the knowledge that the second you will need it, it will be there to buy without any problems.

Schlzm

 

[jomar]

so you're a lawyer. what are you spending your money on if you don't have health insurance and can't afford airfare to your grandma's funeral?

I can't think of any valid reason a gainfully employed grown adult with a family wouldn't have health insurance. completely irresponsible on your part.

 

[Zow]

so you're a lawyer. what are you spending your money on if you don't have health insurance and can't afford airfare to your grandma's funeral?

I can't think of any valid reason a gainfully employed grown adult with a family wouldn't have health insurance. completely irresponsible on your part.

student loans, credit card debt (my wife came into marriage with decent-sized debt), and IRA/life insurance investments mainly. Plus we go out to eat way too much.

 

[SaintsInDome2006]

I don't have health insurance. Haven't for over a year and a half due to my current employer not offering it (and basically paying me a higher salary instead). Chose not to for the dual reason of a calculated risk (I haven't been to the doctor in years) and laziness.

I recognize now the Affordable Health Care Act requires it or there will be a tax penalty. However, I cannot find clear info anywhere. I've heard dates like 3/1/14, 3/31/14, and 4/1/14. But I cannot even figure out what the tax penalty would be for no insurance.

I've found some plans for like 200/month. That kinda blows, but it's doable. Any accountants or insurance agents here know anything about this? My questions are basically when should I enroll by and what's the tax hit for not. My combined household income is about 120k.

You do not have to get health insurance and you are under no duty or legal obligation to do so. It is your choise to not get it or pay a tax.

The tax is:

... 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.
  

You would have to enroll by March 31st to avoid the tax.

Personally I think it sucks that you have to go from paying $0 for a product you don't want or need to having to pay for somewhere likely around $150+ per month (or the tax).

There are a tleast 21 ways you can avoid the tax:

You may qualify for an exemption if:

• You’re uninsured for less than 3 months of the year
• The lowest-priced coverage available to you would cost more than 8% of your household income
• You don’t have to file a tax return because your income is too low (Learn about the filing limit.)
• You’re a member of a federally recognized tribe or eligible for services through an Indian Health Services provider
• You’re a member of a recognized health care sharing ministry
• You’re a member of a recognized religious sect with religious objections to insurance, including Social Security and Medicare
• You’re incarcerated, and not awaiting the disposition of charges against you
• You’re not lawfully present in the U.S.
• You were homeless.
• You were evicted in the past 6 months or were facing eviction or foreclosure.
• You received a shut-off notice from a utility company.
• You recently experienced domestic violence.
• You recently experienced the death of a close family member.
• You experienced a fire, flood, or other natural or human-caused disaster that caused substantial damage to your property.
• You filed for bankruptcy in the last 6 months.
• You had medical expenses you couldn’t pay in the last 24 months.
• You experienced unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member.
• You expect to claim a child as a tax dependent who’s been denied coverage in Medicaid and CHIP, and another person is required by court order to give medical support to the child. In this case, you do not have the pay the penalty for the child.
• As a result of an eligibility appeals decision, you’re eligible for enrollment in a qualified health plan (QHP) through the Marketplace, lower costs on your monthly premiums, or cost-sharing reductions for a time period when you weren’t enrolled in a QHP through the Marketplace.
• You were determined ineligible for Medicaid because your state didn’t expand eligibility for Medicaid under the Affordable Care Act.
• Your individual insurance plan was cancelled and you believe other Marketplace plans are unaffordable.

https://www.healthcare.gov/exemptions/

Also note, if you read through all that if you're not getting a refund this year you don't have to pay the tax. The only way the tax is assessed is they take it out of your tax refund (as I understand it).

HTH

 

[Zow]

Cool. Thanks for the help. I can probably become exempt.

Now the debate is whether I just bite the bullet and get it because it's the safe thing to do.

 

[lod01]

Cool. Thanks for the help. I can probably become exempt.

Now the debate is whether I just bite the bullet and get it because it's the safe thing to do.

You fall ill and you will wish you had it. You are playing Russian roulette. I remember working back in the late 80's and not having employee provided insurance. I paid for it myself making 1/3 of what you are currently making. Had a high deductible and it was mainly for catastrophic but it was better than nothing.

What do you think is going to happen if you get something like appendicitis? You may as well bend over without insurance...cause you are gonna be bent over in the ER.

I got appendicitis at 47. Not only that but with employee provided insurance, I am recouping the $ I spent back in the late 80s to now by having everything checked out. MRI on pretty much every organ in my body, had the colonoscopy, endoscopy, scans of kidneys, and finally the cardiac catheterization procedure. I am good to go. Thus dude is not having a heart attack.

 

[Keerock]

Cool. Thanks for the help. I can probably become exempt.

Now the debate is whether I just bite the bullet and get it because it's the safe thing to do.

Don't pay your electric bill for a couple months, get a shutoff notice, pay your bill. Walla!

 

[Ignoramus]

Cool. Thanks for the help. I can probably become exempt.

Now the debate is whether I just bite the bullet and get it because it's the safe thing to do.

Don't pay your electric bill for a couple months, get a shutoff notice, pay your bill. Walla!

Yeah, I've gotten plenty of shutoff notices. Not for lack of funds (duh!) but rather lack of paying attention to bills. Seems like a huge loophole that's easily exploited.