How Much is the Penalty for No Health Insurance?

Posted by Madison on March 8, 2016

Obamacare, or the Affordable Care Act is now in the third year of providing health insurance. However, it’s only the second year of reconciling the health care requirements and the health insurance premium tax credit on your tax return.

The fee, or insurance penalty tax, for going without health insurance increases each year. Here’s how to determine if you need to report the penalty on your tax return and how much it might be.

Health Insurance Penalty Fee

If you went without health insurance last year, you’ll be subject to an annual fee. The fee does not provide health insurance and is assessed after the year is over when you file your tax return. The penalty fee is calculated based on your Modified Adjusted Gross Income and is due with your tax return on the tax deadline. For more background the penalty fee see our introduction to the Penalty for No Health Insurance.

How Much is the Penalty for No Health Insurance?

The tax penalty for no health insurance varies by year. Penalty tax by year is the higher of:

  • 2014 insurance penalty fee: 1% of income or $95 per adult/$47.50 per child (up to $285 per family).
  • 2015 insurance penalty fee: 2% of income or $325 per adult/$162.50 per child (up to $975 per family).
  • 2016 insurance penalty fee: 2.5% of income or $695 per adult/$347.50 per child (up to $2,085 per family).
  • 2017 insurance penalty fee: Increases will be based on inflation.

The fee is calculated per month and includes household members you claim as dependents. For each full month without coverage, you’ll pay 1/12 of the above fee.

Penalty Maximums

The maximum penalty using the % of income is the national average premium for a Bronze plan. The average price of a Bronze plan is:

  • 2014: $2,448 per person.
  • 2015: $2,570 per person.
  • 2016: $2,699 per person.

Where to Pay the Penalty

You will report the health insurance premium tax credit penalty on your tax return.

Minimum Essential Coverage

You do not have to pay the penalty if you have minimum essential coverage. If you have insurance already through a job or the government you won’t have to worry about the penalty. This includes marketplace health insurance, individual insurance, health insurance through an employer, COBRA, Medicare, Medicaid, CHIP, Tricare and veteran health insurance plans.

Exemptions to Avoid Paying the Obamacare Penalty Fee

You will not need to pay the penalty for Obamacare fee if you qualify for any of the following:

  • Unaffordable Insurance: If the insurance would cost more than 8% of your income.
  • Short Gap: If you go without insurance for less than 3 months of the year.
  • No Filing Requirement: If your income is below the minimum income to file a tax return.
  • Hardship Exemption: The exchange certifies that you suffered a hardship including that you would qualify for Medicaid but your state has chosen to not expand Medicaid.
  • Member of Select Groups: If you are a member of a recognized Indian Tribe, healthcare sharing ministry, religious conscience sect member, incarcerated, or not lawfully present in the US.

More Health Insurance and Tax Topics





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Comments to How Much is the Penalty for No Health Insurance?

  1. All in all the whole system is f#$%& up and billions of tax dollars are being wasted. Government officials are ran by who will pay them the most money. People probly think voting matters. As seen in the white house that useless prick altered the whole government. Thankfully I get a full benefit package through my work. One day the middle class will grow some balls and stand up against uncle sam. In Germany everyone is taxed at the same rate. Well I’m going to use my rescum money and go buy some Astro glide so it don t hurt as bad when I get @$s
    fu%&$* this tax season. Call me when civil war hits ill be on the front line.

    justin

  2. Because of Obamacare my employer stopped offering insurance for many employees for 2014. NH only had one insurance company option in the marketplace to choose. This insurance company did not have several hospitals as approved to use and people were going to have to change providers and drive extra to be seen. The insurance premium was high and covered only preventative visits. Basically crap insurance for a high price. We insurance our 2 kids with the state and we went without. Rather pay $190 penalty. We just went onto Turbo Tax and its charging us $600 each for the tax penalty.

    Andrea

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