As 2016 comes to a close and the new OEP has started, many individuals who failed to secure health insurance coverage are going to be hit with the highest Individual Shared Responsibility payment yet under the Affordable Care Act. In prior years, many individuals just opted to pay the fine for not having minimum essential coverage under the ACA, however, many of them are not aware of the steep increase for not having coverage in 2016.
For 2016 the Individual Shared Responsibility payment increases to $695 per adult and $347.50 per child or 2.5% of household income above their tax filing threshold, whichever is greater. The tax filing thresholds are currently $10,500 for individuals and $20,300 for couples filing jointly. That is just over double what individuals were required to pay for not having health insurance coverage in 2015.
There are a few ways to avoid paying the penalty for not having insurance coverage during 2016. Some of them include:
- Not earning enough income in 2016 to be required to file a federal tax return
- The cost of minimal essential coverage is greater than 8.13% of your household income
- If you were uninsured for no more than 2 consecutive months
- You qualify for a hardship exemption (Use the Exemption Tool on HealthCare.gov to see if you qualify)
Please visit www.healthcare.gov to apply for health insurance coverage for 2017. The Open Enrollment Period runs from November 1st to January 31st.
To consult with a professional Liberty Tax® ACA Advisor at your local Liberty Tax® office, contact 800-673-8600 or visit HealthCareTaxInfo.com.