Speculation that many individuals will opt to pay the annual penalty
instead of acquiring health insurance has the success of the Affordable Care
Act (ACA), also called Obamacare, in question. However, recent numbers from the
Department of Health and Human Services (HHS) show an increase in young adults (18
- 34) who have enrolled in the Health Insurance Marketplace plans in the last
month. The HHS stated that 81 percent of these young adults have selected plans
above the lowest available plan, the bronze.
The HHS continued to break down those that have signed up for
health insurance, stating:
- Nearly 3.3 million individuals have selected plans from the
Marketplace website between October 1, 2013, through February 1, 2014. This
number breaks down to 1.4 million in the State Based Marketplaces and 1.9
million in the Federally-facilitated Marketplace.
- Of those 3+ million:
- 55 percent are female;
- 45 percent are male;
- 31 percent are 34 and under; and
- 25 percent are between 18 and 34.
So when do you have to have health insurance? The deadline is
March 31, 2014, if you want to avoid penalties. For this year, the annual
penalty is either 1% of your income or $95 per adult and $47.50 per
child, whichever is larger. The fee for being uninsured will increase
The reason some are opting to pay the penalty rather than get
health insurance is basic economics: the penalty fee costs less than the
monthly premiums. For example, a single person making $50,000 would pay full price for a health insurance plan
through the Marketplace. The average cost for a plan could be anywhere from $2,400
to $3,500 a year. The penalty for that individual would only be $400 for the
Affordability and necessity are two major components for those
deciding on whether or not to buy health insurance. It has been reported that
some just don’t feel like they need to pay for health care monthly, stating
they would rather pay as they go.
The rules continue to change with Obamacare. Recently announced,
mid-size businesses have been given another year of reprieve. Businesses with
50 – 99 employees have until 2016 to comply with the law. Speculation still
surrounds Affordable Care Act.
Disclaimer: Every effort has been taken to provide
the most accurate and honest analysis of the tax information provided in this
blog. Please use your discretion before making any decisions based on the
information provided. This blog is not intended to be a substitute for seeking
professional tax advice based on your individual needs.