People are left uninsured after the open enrollment of...
The Affordable Care Act (ACA) was introduced to remove some of the obstacles that prevented many people from buying health insurance. However, not everyone has signed up for the ACA insurance marketplace, and this is a violation of one of the clauses that states that every person in the United States must have health insurance coverage unless exemption rules are met (exemption rules are listed below). Millions of people who haven’t acted in agreement with the Affordable Care Act have some tax penalties crawling up their bank accounts, and it’s up to the individual to ensure that the costs are covered.
How Much Is The Obamacare Tax Penalty?
The penalty costs can be derived in two ways: First by paying a percentage of your adjusted household gross income as presented in your annual tax filings, and the second option is based on a flat rate scale. Tax returns for the year 2016, the penalty is pegged at 2.5% of the adjusted household gross income, or a flat rate scale of $347.50 per child, $695 for adults, and maximum amount that can be as high as $2,085. Your tax return does have a lot of say in the penalty amount you pay, and each year the penalty is likely to increase to keep up with inflation. This is considered as the COLA (Cost-of-Living Adjustment). The penalty, initially, was designed to encourage more people to buy insurance coverage. For the year 2017, and beyond, the percentage option will remain pegged at 2.5%, but the flat rate option will have some adjustments to take care of inflation. (See image below)