Federal penalties may be more costly than people may realize
The federal health insurance mandate has been in effect in the U.S. for nearly three months, but penalties for those without insurance coverage are not expected to be seen until after March 31. When the open enrollment period for insurance exchanges comes to a close, those without insurance coverage will become vulnerable to federal penalties. These penalties levy a 1% of annual household income fee or a flat rate of $95 based on yearly income. These penalties, however, may only be the tip of the iceberg when it comes to the cost of being uninsured.
Consumers could be missing out on some information concerning insurance mandate and federal penalties
Many people believe that the federal penalty is quite small when it is compared to the actual cost of health insurance. According to Jackson Hewitt Tax Service, many people simply do not know that a penalty for being uninsured even exists. According to the firm, consumers are typically shocked when they learn how expensive federal penalties can become, especially after the first year they have been issued.
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Penalties for uninsured families could be as high as $11,000 this year
The maximum penalty that uninsured individuals can receive in 2014 is $95, but those with a high annual income can see higher penalties. Notably, the $95 penalty can be attributed to all people within a given household that have no insurance coverage. A two-adult household, for example, can see their penalty reach $190. The 1% penalty can acts in a similar fashion and families that go uninsured could face as much as $11,000 in fines.
There are certain conditions that make consumers exempt from federal penalties
The health insurance mandate is designed to ensure that consumers have insurance protection and is meant to resolve problems within the insurance market. The mandate has been heavily criticized, but has managed to be upheld by the Supreme Court as constitutionally sound. There are exemptions to the penalties that could be levied against those without insurance coverage. These exemptions can be found on the HealthCare.gov website.