Countdown to Coverage: Last Call to Enroll in 2015, Avoid Fines

Melissa McChesney

The Health Insurance Marketplace open enrollment period for 2015 ends February 15, but there’s still time to sign up before the deadline. If you miss the deadline you will not be able to sign up for coverage until the fall, unless you have a qualifying life event. (Exception: enrollment in Texas Medicaid and CHIP for lower-income children and selected adults, as well as small business coverage, are available 365 days a year.)

Over the last few months we’ve provided all the tools you need to sign up for health insurance for 2015. Be sure to review our blog posts about the enrollment timeline, how to find out if you are eligible for financial help, and where to find local enrollment assistance.

Remember, the Affordable Care Act requires citizens and lawfully residing immigrants to have health coverage – or minimal essential coverage  – throughout the year. Individuals who are not covered for most of the year may face fines on next year’s tax return. For the 2014 tax year it has been estimated that 2 to 4 percent, or 3 to 6 million taxpayers, will face a fine.

What are the fines for not having coverage in 2015*?

If you don’t have coverage in 2015, you’ll pay the higher of these two amounts:

  • 2 percent of your yearly household income above the tax filing threshold ($10,150 for an individual). The maximum penalty is capped at the national average premium for a bronze plan.

or

  • $325 per adult ($162.50 per child; family maximum $975)

To illustrate how the penalty is calculated, let’s take the example of a single adult whose modified adjusted gross income (MAGI) is $20,000.

Percent of Income PenaltyFlat Fee Penalty
$20,000 - $10,150 = $9,850 x 2% = $197$325

This individual would pay the higher of the two, the $325 flat-fee penalty.

Who is exempt from the requirement to have insurance? 

Under certain circumstances, individuals are exempt from paying the fine for not having health insurance. For example, if your income is low enough that you do not need to file taxes or if you were without coverage for less than three months you are exempt. Individuals may also be exempt from paying the fine if they faced a hardship, including being homeless, filing for bankruptcy, or being determined ineligible for Medicaid (the “coverage gap”) because their state chose not expand coverage under the Affordable Care Act.

The full lists of exemptions and hardship exemptions are available on Healthcare.gov along with instructions on how to apply for an exemption.

I’m convinced. Health insurance good, fines bad. Now what?

If you don’t have health insurance, go to Healthcare.gov and apply for coverage right now—you only have until February 15th. You can also get in-person application and enrollment help from local enrollment helpers. If you fall into the coverage gap and don’t have an affordable option for health coverage, Healthcare.gov can provide you information on exemptions from paying a penalty.

*All of the above information is in reference to the 2015 tax year. Look for upcoming posts on what you need to do on your 2014 tax return.

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