What is the Individual Mandate Fee?
Tax season is right around the corner and many Americans might be surprised to find out they will have to pay The Individual Mandate Fee or health insurance penalty this year
What is The Individual Mandate Fee?
In accordance with The Affordable Care Act (ACA), every American is required to have health insurance coverage. If you do not have the minimum essential coverage (Bronze Plan), and do not qualify for an exemption, you will have to pay a the individual mandate fee at tax time.
How Much is the Fee in 2015?
If you don’t have health insurance coverage, you’ll have to pay the higher of these two amounts when you file your 2015 income taxes:
For single earners making income above the federal tax filing threshold of $10,500 and joint earners above $20,300 you will have to pay 2% of yearly household income.
Or a minimum of $325 per person ($162.50 per child under 18). The maximum penalty per family using this method is $975.
Furthermore, The Individual Mandate Fee is schedule to increase each year after 2015. In 2016, the fee will increases to 2.5% of your income or $695 per person. After that, the fee will be adjusted for inflation.
When Is The Individual Mandate Fee Due?
The fee is due when you file your federal income tax return for the previous year. For instance, if you did not have health insurance coverage in 2014 and you did not qualify for an exemption, when you file your tax return this year, the fee will be assessed when you file your 2014 tax return.
What Are The Exemptions to The Individual Mandate Fee?
You may qualify for an exemption from the individual mandate fee for 2015 if you any of the following apply to you:
1. You could not afford coverage – minimum required coverage is defined as the Bronze Plan
2. You Are not a U.S. citizen or a legal resident alien in the United States
3. You had a gap in coverage for less than 3 consecutive months during the year
4. You are not able to qualify for Medicaid
5. You are a member of a federally recognized Indian tribe
6. You are in prison (you get free health insurance if you are incarcerated)
7. You are a member of a recognized religious sect with objections to health insurance
According to a recent poll by The Kaiser Foundation, the rate of uninsured Americans has stayed steady at 13.4% since 2008. Also revealed in the poll is that 48% of Americans were unaware that they would have to pay The Individual Mandate fee for failing to acquire health insurance.