Not having health insurance has always involved financial risks. You could have an accident or develop a major illness and pile up thousands of dollars in medical bills. In addition to that, you could also get fined for not having health insurance. What many people don’t realize is that the penalties are going up significantly in 2015.
The Supreme Court ruled in 2012 that the Obamacare coverage requirement and its accompanying fines were constitutional. For 2014, the fine is the greater of $95 per person or 1 percent of household income above the threshold for filing taxes. It will jump in 2015 to the greater of 2 percent of income or $325. By 2016, the average fine will be about $1,100, based on government figures.
This year, when you file your income taxes, you will need to report to the IRS on your health insurance status for the year 2014. You need only to check a box if you have had coverage. IRS will start collecting fines from some uninsured people, and deciding if others qualify for an exemption. Few people are aware of the more than 30 exemptions. To find out if you qualify for an exemption use the Tax Policy Center’s Affordable Care Act penalty calculator.
Timing is critical for uninsured people who want to avoid the penalties for 2015. February 15 is the last day of open enrollment under the health law. After that, you will be locked-out from enrolling until November unless you have a special qualifying event.