Not purchasing health coverage can cost you
The average silver level health care plan costs between $200 and $300. At $2,400 to $3,600 for annual premiums, those numbers far exceed the penalty portion of the Affordable Care Act. So, many Americans chose not to purchase health insurance this year. Under the Act, people who do not purchase insurance will be on the hook to the IRS by April 15, 2015. The amount of the penalty can be either $95 or 1 percent of your household income, whichever is higher. For this first year, there is a cap of $285 per family but that cap rises steeply over the next few years (in 2016, the cap will be $695 up to a maximum family amount of $2,085). The percentage also rises from this year’s 1 percent to 2.5 percent n 2016.
Some religious groups, those who will be uncovered for three months or less, members of Indian tribes, illegal immigrants, people on Medicare and prisoners are not subject to the penalty. (go to IRS.gov for an expanded list) As the law ages, the IRS will have an increasingly easier time identifying those people who opt out of the program. For more information on how opting out will affect your tax return, go here or if you are interested in a calculator to figure out the penalty for not having health insurance, go here.