The health insurance mandate penalty under the Affordable Care Act (ACA) could affect 4 percent of taxpayers, NBC News reported yesterday. Taxpayers who have not signed up for health insurance this past year face the penalty mandated by the ACA, also commonly known as ObamaCare.
“This is the first year that Americans will have to worry about health insurance at tax time. The 2010 Affordable Care Act requires that just about everyone have health insurance or else pay a fee in the form of some extra income tax,” NBC News reported.
Most taxpayers will check a box on their 1040 tax form which tells the IRS that they do have health insurance in compliance with the ObamaCare mandate. Some taxpayers below certain income levels, who simply cannot afford paying for their coverage, are not required to show proof of coverage.
“An estimated 3 million to 6 million households that file 2014 income tax returns might incur penalties this tax season for failing to secure health insurance last year under the Affordable Care Act,” the Portland Press Herald reported.
The penalty for not having health insurance under the ObamaCare mandate is one percent of a taxpayer’s income, or $95 per adult and $47.50 per child. The tax penalty for being uninsured rises to two percent of income, or $325 per person, in 2015, and 2.5 percent of income or $695 per person in 2016.
Taxpayers have until February 15 of this year to signed up for health insurance to comply with the mandate under ObamaCare. The deadline to file federal tax returns is April 15. Taxpayers who are receiving the Earned Income Tax Credit are not subject to the tax penalty.
Millions of taxpayers who have signed up are receiving subsidized health insurance under ObamaCare, which is in jeopardy depending on how the Supreme Court rules on the legality of those subsidies in many states, the Inquisitr reported yesterday. The Supreme Court might strike down the subsidies being enjoyed by millions in the states that have not set up state-run health insurance exchanges. This could leave millions unable to afford the coverage unless Congress and the president come up with a legal solution or those remaining states set up the exchanges.
Polls have showed the health insurance mandate to be one of the least popular provisions of the Affordable Care Act. It will remain to be seen if this part of the ACA will lead to more public pressure on Congress to change or repeal ObamaCare once more Americans are required to pay the tax penalty for lacking coverage.
[Image of ObamaCare mandate tax penalties from bcbsnd.areavoices.com]