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Question:


Help me understand: With the Affordable Care Act, every American is required to have health insurance. What happens if I don’t get any?
-Confused


Answer:


I assume from your question that your employer doesn’t provide you with health coverage and that you’re not eligible for Medicare, the federal program for the elderly, or Medicaid, the federal program for the poor. If you choose not to buy a health policy because you’re middle aged and it’s too expensive or you’re young and you feel that you don’t need it and would rather pay any medical bills out of pocket, then, yes, you will fall afoul of the so-called individual mandate of the Affordable Care Act. Actually, you already have. Penalties for being uninsured took effect on Jan. 1, but there’s a grace period until April 1.
The penalty in 2014 for being uninsured – and you can’t have any old policy; you need one that meets federal guidelines for quality – will be the greater of $95 or 1 percent of your modified adjusted gross income, a figure that for most people will be very close to the adjusted gross income that they report on their tax returns. So if your MAGI were $40,000 this year, your penalty would be $400. The figures go up to the higher of $325 or 2 percent of MAGI next year and $695 or 2.5 percent in 2016. Anyone who buys a policy during the year will have the penalty waived for each month that he or she is covered. The penalty is waived altogether for people who don’t earn enough to file a tax return (they would probably be eligible for Medicaid, anyway), and the penalty is capped at whatever the average annual premium is for a bronze health plan, the most basic plan offered on government insurance exchanges, where a taxpayer lives.

-Conrad de Aenlle



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