ACA Penalties 2017-05-04T10:27:33+00:00

Do I get penalized for not having insurance?

Although we don’t know yet what will happen with the penalties with the new presidential administration, the individual mandate is currently still active. That means, if you don’t have ACA qualified insurance, you could be penalized up to 2.5% of your annual gross income. On top of that, you’d be liable for any medical bills you incur. If you’re only uninsured for 1-2 months, you won’t have a penalty.

What counts as “qualified” insurance so I don’t get penalized?

The ACA (Affordable Care Act) has rules surrounding what types of plans are “qualified”. Generally speaking, the most common phrase used to describe qualified coverage is health insurance that meets Minimum Essential Coverage (MEC) guidelines. Generally speaking, employer-sponsored (group) plans and individual major medical plans count as having MEC. Short-term insurance, Gap insurance plans, indemnity plans, critical illness, and accident policies are NOT considered qualified insurance. Though these options may seem cheaper for a monthly premium for some, they don’t fulfill the requirements, so you’d still face a penalty. If it sounds too good to be true – ask us first!

Can I find out what my penalty is?

According to Healthcare.gov, the fee can be calculated one of two ways. Your penalty would be the higher of:

  • 5% of your annual gross income (maximum using this method: total yearly premium for the national average price of a bronze plan)
  • $695 per adult ($347.50 per child) (maximum using this method: $2085)

You can get an idea of your penalty here: Penalty Estimator

Is there any way out of a penalty? (exemptions?)

In certain situations, you or your family members may qualify for an exemption. There are several types of exemptions out there. The most common exemption we have seen is income-related: The lowest-priced coverage available to you, through either a Marketplace or job-based plan, would cost more than 8.13% of your household income, even after tax credits are applied. Some exemptions require an application, and some are only able to be taken on your tax return. Learn more on the healthcare.gov website.