Penalty

Penalty

Tue, 07/20/2021 - 15:03
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The penalty at the federal level is gone, starting January 1, 2019.

♦ Several states have their own mandate and some assess a penalty for not having health coverage.

If you don’t have a health plan that qualifies as minimum essential coverage, you may have to pay a fee for the months you’re uncovered.

♦ This fee is often referred to as a "penalty." The IRS calls the fee a Shared Responsibility Payment.

The fee was calculated two ways. You were responsible for paying the higher amount.

For 2018, the fee was 2.5% of household income, up to a maximum of $3,396.; or a dollar amount of $695 per adult ($347.50 per child), up to a maximum of $2,085 (3 x $695).

• The $3,396 figure is the average price of a Bronze plan sold though the Marketplace.

The penalty was paid when federal income tax returns were filed. People with very low incomes and others were often eligible for exemptions.

Anyone uncovered just some months of the year, paid 1/12 of the penalty for each month they were uninsured. If someone was uncovered for only 1 or 2 consecutive months, they did not have to pay the fee at all.

The penalty was paid on a person's federal income tax return.

Update: December 22, 2017

President Trump signed into law a tax bill which included a provision eliminating the penalty for not buying health insurance.

It took effect starting in 2019.

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