Courtesy of Mish.
The idea behind Obamacare is to make the young and the healthy overpay for insurance to subsidize everyone else.
In an effort to persuade individuals to purchase insurance, the law provides a scale of escalating penalties starting in 2014 and increasing in 2015, then again in 2016.
Actually, there are two penalty rates, and you pay the higher of the two, not both.
2014 Penalties
- 1% of your yearly household income. The maximum penalty is the national average yearly premium for a bronze plan.
- $95 per adult ($47.50 per child under 18). The maximum penalty per family using this method is $285.
2015 Penalties
- 2% of yearly income
- $325 per adult ($162.50 per child under 18)
2016 Penalties
- 2.5% of yearly income
- $695 per adult ($347.50 per child under 18)
If you’re uninsured for just part of the year, 1/12 of the yearly penalty applies to each month you’re uninsured. If you’re uninsured for less than 3 months, you don’t have a make a payment.
No Enforcement of Penalties in 2014
By the way, Bloomberg reports … “As Peter Gosselin, a senior health-care policy analyst at Bloomberg Government who worked on the early implementation of the law, explained to me before the change was announced, the IRS has already signaled in Senate testimony that it will use a light hand in enforcing the penalties in 2014. Gosselin says he interpreted the testimony to mean “there isn’t a soul in this country that is going to pay an individual mandate penalty” next year.”
Nonetheless, inquiring minds should be interested in a math table on penalties for all the years. …
