Americans who do not have health insurance as of January 2014 will be subject to the Affordable Care Act's Individual Mandate. The fine will be levied against uninsured people after March 31, marking the end of the 3 month grace period.
Here is what you need to know about one of the most controversial parts of ObamaCare:
1. In 2014 Individual Fines Will Be 1 Percent or $95; They Increase Every Year
U.S. citizens have until March 31 to buy health insurance or before they will be subjected to the mandate. When filing 2014 taxes, those who do not have health insurance will be subject to 1 percent of their taxable income, or a fine a $95 per adult and $47.50 per child. No family will be subject to a fine larger than $285.
These amounts will increase every year. In 2015, a person will be fined 2 percent of taxable income and the fee will be raised to $325 per adult and $162.50 per child. In 2015, no family will be charged an amount higher than $975.
By 2016, if a family or individual is still uninsured, those filing taxes will be fined 2.5 percent of taxable income or face a penalty of $659 per adult and $347 per child. IN 2016, no family will be subject to fine larger than $2,085.
2. The Employer Mandate Will Be $2,000 Per Employee
After January 1, companies with over 50 full-time employees are now required to provide their employees with health insurance. If an employer does not offer health insurance, they must pay a fine of $2,000 per full-time employee minus the first 30 employees.
However, if employees offer heath insurance that their employees still cannot afford or does not cover 60% of total costs, that employee becomes eligible for a premium tax credit. Employers will be charged $3,000, or $750 for every full-time employee receiving this tax credit.
The employer will be forced to pay whichever of the above fines is less.
3. If You Pay the Fine, You Are Still Uninsured
Healthcare.gov posted a special notice reminding Americans that those who choose to pay the fine are still uninsured. Paying the fine means you are still liable to pay the full cost of any healthcare or medication needed.
4. You Can Get Insurance During the Next Enrollment Period
If you are still uninsured after March 31, you have run out of time and will have to face the 2014 penalty. However, if you wish to avoid paying the increased 2015 fine, you can buy insurance via healthcare.gov when the enrollment period reopens in the fall of 2014.
The only exception to this is if a person becomes qualified for the "special enrollment period." This occurs when someone has a qualifying life event like moving to a new state, having a drastic change in income, or a change in family numbers, i.e. having a baby, a death, or getting married/divorced.
5. It Was Found Constitutional
You might be thinking, how can this be possible? How can the government force me to get health insurance and then fine me if I don't? Well, in June the much-disputed ObamaCare mandate was deemed constitutional by the Supreme Court. Prosecutors arguing exactly what was just laid out above were denied their claim because the court found that the mandate fit in with the government's right to levy taxes on its citizens.