How Many Americans Will Have to Pay the Individual Mandate Penalty?
December 31, 2014
Obamacare imposes fines on individuals who fail to carry insurance, but this upcoming tax season will be the first time that taxpayers will have to report to the IRS whether they had insurance this year, Fox News reports. The fine for 2014 is the higher of $95 per person or 1 percent of household income. The penalty increases for 2015, rising to $325 per person or 2 percent of household income.
How many people will owe fines? It's unclear, because the law provides a number of exemptions that allow people to remain uninsured without paying a penalty. For example, an individual can fail to carry insurance and avoid the penalty if he is uninsured for less than three months, if the cheapest health coverage available to him costs more than 8 percent of his income or if he qualifies for a hardship exemption. These hardship exemptions include homelessness, eviction, a recent domestic violence experience, the death of a close family member or if "[y]our individual insurance plan was cancelled and you believe other Marketplace plans are unaffordable."
According to tax-preparation company H&R Block:
- Only 4 million uninsured Americans will owe a penalty to the IRS for failing to carry insurance.
- Twenty-six million uninsured Americans will qualify for one of the law's 30 exemptions.
To avoid 2015 penalties, the uninsured must enroll in an insurance plan by February 15, 2015. However, Fox News cites a recent Kaiser Family Foundation poll, which found that just 5 percent of the uninsured are aware of that deadline.
Source: "ObamaCare fines rising in 2015, IRS prepares to collect," FoxNews.com, December 30, 2014.
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