ACA Tax Penalty

[imoldernu]

From Washington Post:

Those Americans who didn’t get health insurance last year could be in for a rude awakening when the IRS asks them to fork over their Obamacare penalty — and it could be a lot more than the $95 many of them may be expecting.

The Affordable Care Act requires those who didn’t have insurance last year and didn’t qualify for one of the exemptions to pay a tax penalty, which was widely cited as $95 the first year. But the $95 is actually a minimum, and middle- and upper-income families will actually end up paying 1 percent of their household income as their penalty.

TurboTax, an online tax service, estimated that the average penalty for lacking health insurance in 2014 will be $301.Obamacare penalty may come as shock at tax time - Washington Times

Thismay have been posted... didn't see it.

 

[marko]

Still, for a lot of people, even a $300 fine is a lot better deal than $1200 a month. They can still do what they've always done: go to the ER if they have to and if they're fairly healthy otherwise, come out ahead.

Personally I have, like and NEED health insurance, but if I was 28 y.o. and was just above the subsidy cliff, I'd really, really think about just paying the fine.

 

[2B]

The problem with going to the ER is that any assets you have are subject to "collection." You can't just go there, get treatment and say "bye." They will come after you so it's only viable for people that are truly without assets or jobs.

The problem I see is that many people, even with their subsidies, do not want to divert the cash needed to pay their portion of the premium or copays required from where its currently going. This could be anything from their essential I-phone 6 or their utilities. I'm not in a position to generalize but other expenses are more important in their minds.

These penalties will continue to grow. This year's impact will be a wake up call but most will just grumble.

The primary beneficiaries of the ACA are members of this forum. Most of us consider heath insurance a necessity. We would buy it anyway. The ACA guarantees we can get a policy. Having assets doesn't keep us from getting the subsidy by controlling our taxable income. It encourages the potential early retiree with ample resources to retire earlier. It does very little for the people that don't have heath insurance as one of their priorities.

 

[marko]

The primary beneficiaries of the ACA are members of this forum.

Having assets doesn't keep us from getting the subsidy by controlling our taxable income. It encourages the potential early retiree with ample resources to retire earlier. It does very little for the people that don't have heath insurance as one of their priorities.

Eggs...actly!

As my accountant once told me: "The trick is to look like one of them on paper while being one of us" He was talking about taxes, but it applies here as well

 

[ArkTinkerer]

I agree we benefit since they count income but not assets but worry how long that will last. LBYMers are an unprotected minority group and an easy target since we "don't really need the subsidy".

I disagree that we are the "primary beneficiaries of the ACA". I think that would be hospitals and insurance companies. I hear that the number of uninsured has dropped at most hospital emergency rooms in my state. I have yet to hear that hospital prices have dropped since they no longer have to write off those bills.

 

[wolf]

What bothers me, is the PRESS, always emphasized the $95 penalty.


When it was well know, it was the HIGHER, $95 or 1%.


For 2015 tax year it worse. $325 or 2%, which ever is higher.

 

[heeyy_joe]

No worries until 2017...

 

[clifp]

Still, for a lot of people, even a $300 fine is a lot better deal than $1200 a month. They can still do what they've always done: go to the ER if they have to and if they're fairly healthy otherwise, come out ahead.

Personally I have, like and NEED health insurance, but if I was 28 y.o. and was just above the subsidy cliff, I'd really, really think about just paying the fine.

Actually from my understanding is you don't even need to pay the fine.

Just make sure your withholding is slightly less than the taxes you owe, and then pay the additional taxes, come April, but don't pay the fine.

Personally I wouldn't do that but it appears that IRS is not allowed to garnish wages or attach bank accounts to collect unpaid ACA fines.

 

[EastWest Gal]

Still, for a lot of people, even a $300 fine is a lot better deal than $1200 a month. They can still do what they've always done: go to the ER if they have to and if they're fairly healthy otherwise, come out ahead.

Personally I have, like and NEED health insurance, but if I was 28 y.o. and was just above the subsidy cliff, I'd really, really think about just paying the fine.

A 28 year old can get a catastrophic plan for $140/mo, even if no subsidy.


Sent from my iPhone using Early Retirement Forum

 

[MBSC]

Actually from my understanding is you don't even need to pay the fine.

Just make sure your withholding is slightly less than the taxes you owe, and then pay the additional taxes, come April, but don't pay the fine.

Personally I wouldn't do that but it appears that IRS is not allowed to garnish wages or attach bank accounts to collect unpaid ACA fines.

Under current law, which could be changed in the future, you would need to do this every year until you die. The unpaid penalty/fine carries over from year to year with interest added.

http://americanactionforum.org/weekly-checkup/loophole-gives-uninsured-way-around-aca-penalties

 

[mickeyd]

I hear that the number of uninsured has dropped at most hospital
emergency rooms in my state. I have yet to hear that hospital prices have
dropped since they no longer have to write off those bills.

Similarly, I have not noticed that the section on my recently paid Real Property tax annual bill under the heading of "Hospital District" any reduction in the amount that I am taxed. In fact, it has risen about 10%.

Thought that ACA was supposed to generate tax reductions in this area.

Guess I was wrong again.

 

[clifp]

Under current law, which could be changed in the future, you would need to do this every year until you die. The unpaid penalty/fine carries over from year to year with interest added.

Loophole Gives Uninsured Way Around ACA Penalties | Weekly Checkup | American Action Forum

I was curious about the unpaid interest and fine.. Good to know and I agree I doubt the current system will stay in place forever