- Tax Day and Healthcare Fines Come Down On Tuesday
- April 17, 2017
Your federal income taxes are due April 18 and, likely for several million people, so is a fine for failing to get health insurance.
Despite a lengthy debate, Congress has not yet acted on a bill to repeal portions of the Affordable Care Act. That means the law and almost all of its regulations remain in force, for now.
Still, those who lacked insurance for more than three consecutive months, or who bought individual insurance and got federal help paying the premiums, need to do a little more work.
Those with no insurance or a lengthy gap may be required to pay what the federal government calls a “shared responsibility payment.” It’s a fine for not having coverage, on the theory that even those without insurance will eventually use the health care system at a cost they can’t afford and someone else will have to pay that bill.
Many people without insurance, however, qualify for one of several dozen “exemptions” from the fine. Nearly 13 million tax filers claimed an exemption for 2015 taxes, according to the IRS. The most common were for people whose income was so low (less than $10,350 for an individual) that they are not required to file a tax return, Americans who lived abroad for most of the year and people for whom the cheapest available insurance was still unaffordable (costing more than 8 percent of their household income).
The fine for 2016 taxes is the greater of $695 per adult or 2.5 percent of household income. Fines for uncovered children are half the amount for adults. Fines are pro-rated by the number of months you or a family member was uninsured.
The maximum fine is $2,676; that is the national average cost of a “bronze” level insurance plan available on the health exchanges. But most people do not pay anywhere near that much. Last year, said the IRS, an estimated 6.5 million tax filers paid a fine that averaged $470.
If you bought your own insurance from the federal or a state health insurance exchange and you got a federal tax credit to help pay for that coverage, you also have to take a step before you can file your taxes.
People who got those tax credits must fill out a form that “reconciles” the amount of subsidies they received based on their income estimates with the amount they were entitled to according to their actual income reported to the IRS.
In 2016, 5.3 million taxpayers had to pay the government because they got too much in tax credits, compared with 2.4 million who got additional money back. But among those who underestimated their incomes and had to pay back some of those tax credits, 62 percent still received a net refund on their taxes.
- Category: Articles Library, Health Insurance, Healthcare Reform, Most Popular, Tips, Top Headlines
Life Insurance Quotes
Leave a Reply