What happens if I don’t get health insurance?
You have a six month open enrollment period to buy health insurance (October 1, 2013 to March 31, 2014). If you choose not to get health insurance, you will be on your own when it comes time to pay medical bills. Estimating these bills without coverage is a roll of the dice.
On top of that, you will have to pay a fee to the federal government each year, which the IRS will take from your tax refund. If you do not pay the penalty, the IRS will carry it over to the next year’s tax filings and can charge interest on that unpaid penalty. This financial penalty will increase annually.
Penalty Amounts & Example
Example: Gloria is a 36-year-old woman, a single parent and has 2 children. Her annual family income is $36,000.
The penalty in 2014 is: $95 per uninsured adult and $47.50 per uninsured child – up to $285 or 1% of family income; whichever is higher.
- If Gloria remains uninsured in 2014, her penalty would be: ($95 + $47.50 +$47.50) = $190 or ($36,000 x .01) = 360
- In 2014, she would have to pay a $360 fine since it is the greater amount.
The penalty in 2015 is: $325 per uninsured adult and $162.50 per uninsured child – up to $975 or 2% of family income; whichever is higher.
- If Gloria is still uninsured in 2015, her penalty would be: ($325 + $162.50 +$162.50) = $650 or ($36,000 x .02) = $720
- In 2015, she would have to pay a $720 fine since it is the greater amount.
The penalty in 2016 is: $695 per uninsured adult and $347.50 per uninsured child – up to $2,085 or 2.5% of family income; whichever is higher.
- If by 2016 Gloria remains uninsured her penalty would be: ($695 + $347.50 +$347.50) = $1,390 or ($36,000 x .025) = $900
- In 2016, she would have to pay a $1,390 fine since it is the greater amount.
In 2017 and beyond: penalty amounts will increase annually by the cost of living.
Gloria, and every other American required to get insurance under the Affordable Health Care Act, will have to carefully consider all options when choosing whether paying the penalty is worth the financial risk.
Reminder: You Must Enroll in the Public Exchange (Marketplace) by March 31, 2014
If you don’t get health insurance by March 31, 2014, you will have to wait until the next open enrollment period to get coverage in the Marketplace, unless you have a qualifying life event.