Covered California has established a special-enrollment opportunity for people who are just now learning the tax consequences for going without health care coverage. Although it’s too late to avoid the tax penalty for being uninsured in 2014, consumers have until April 30 to protect themselves and minimize the financial penalty for being uninsured in 2015. For 2015, the penalty for being uninsured increases to $325 per adult in a household (half that per child) or 2 percent of household income — whichever is greater.
The federal Patient Protection and Affordable Care Act requires most people to be insured, or they will pay what is called the “shared responsibility payment” when they file their taxes. The chart below illustrates two examples of how much an individual and a family of four would owe for being uninsured last year and how much their penalties increase if they remain uninsured in 2015.
Jim will pay $299 because he didn’t have health insurance in 2014. Eduardo, Julia and their two children owe $497. Those payments will essentially double if they remain uninsured in 2015.
As the penalty increases, it makes more and more sense for people who have been waiting on the sidelines to get in and get covered.
In some cases, it actually costs less to buy insurance than to pay the penalty. For example, a 30-year-old person making $18,000 a year would pay $252 over the course of 2015 to be covered under the least expensive Bronze plan. Or the individual could go without insurance for the entire year and pay a $325 penalty when they file a tax return next year.
A couple, both 30 years old, making $28,000 dollars a year combined would pay $468 over the course of 2015 to be covered under the least expensive Bronze plan. Or they could go without insurance for the entire year and owe $650 when they file their taxes next year.
For more information on special enrollment, visit www.CoveredCA.com/individuals-and-families/getting-covered/special-enrollment.
In addition to Covered California’s special-enrollment opportunities, consumers may also be able to qualify for Medi-Cal, which has year-round enrollment.
