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What’s the Penalty for Not Having Health Insurance?

February 11, 2016

If you’re without healthcare coverage, you will want to highly consider enrolling. Fines under Obamacare have nearly doubled for 2016.

Wondering what’s at stake if you are without coverage under Obamacare? Well, your medical health for starters, but for 2016, your financial health will be at higher risk as well. The penalty for being uninsured for a full 12 months has risen to $695 or 2.5% of taxable income for this year, making enrollment in coverage essential for most Americans in 2016.

Penalties under Obamacare

If you are without coverage in 2016, here is a look at what’s at stake:

  • Health- Life is unexpected—you might be healthy now, but that could change quickly. You do not want to be caught paying out of pocket for medical care if you are suddenly in a situation where your health is suffering. The primary emphasis of the increase in fines is to stress the importance of having health insurance.
  • Finances- Fines for being uninsured have nearly doubled since 2015. The fine for not having healthcare is 2.5% of your income, or $695 per adult and $347.50 per child (you are required to pay whichever amount is higher). This penalty can reach a maximum of $2,085. Last year, the fine was 2% of income, or $325 per adult and $162.50 per child, with a maximum of $975.

Penalties as a motivator?

The Obama administration intends to influence all Americans to enroll in coverage with the rise in fines. The increase is not good news for most Americans, but the Administration figures that since subsidized customers are now paying on average about $100 per month of their own money, paying $695 for healthcare will be able to cover six months or more of coverage (rather than owing that as a penalty).

Are there any exemptions from the penalties?

There are a number of individuals absolved from the penalties for not having healthcare. This includes, but is not limited to:

  • Those with income below the federal filing threshold amount,
  • Anyone whose finances were increased in the past year due to an ailing family member,
  • Anyone who suffered the death of a close family member in the past year,
  • Anyone unable to pay medical expenses incurred in the last two years,
  • Those whose utilities have been shut off,
  • Those who’ve suffered a flood, fire, or natural disaster in the past year,
  • Those who were homeless this past year, or are currently homeless,
  • Anyone who filed for bankruptcy in the last six months,
  • Anyone who had jail time last year.

Benefits under Obamacare

Besides avoiding hefty fees, why is enrolling in healthcare a good decision? There are a number of benefits under Obamacare that will make coverage worth every penny. This includes:

  • Hospitalization
  • Emergency care
  • Pediatric care
  • Maternity care
  • Lab testing
  • Preventative care
  • Rehabilitation services
  • Mental health care
  • Outpatient services
  • Young adults can stay on their parents’ plan until age 26

So, how do I sign up for coverage?

Under ObamaCare, you are allowed one short coverage gap exemption which covers less than three months in a row without coverage (need to have coverage for at minimum one day of the third month), so you can use this time to figure out your enrollment. Most employers are required to sign you up for coverage under Obamacare (Read our blog: “IRS Changes ACA Compliance Rules for Small Employers”), but if you work at a company of less than 50 fulltime employees, are unemployed, or otherwise unable to access healthcare, visit for options. You might be eligible for free coverage under Medicaid obtained through a subsidy.

Anyone can sign up for Obamacare during the yearly Open Enrollment period which, for this year, ends January 31st 2016.

Make sure you’re aware of your obligations for the Obamacare penalties. Enrolling in coverage will be a rough hit to your wallet initially but will be worth it when your health fails you unexpectedly.

Questions? Contact any member of our Healthcare Services Group.

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