These days, having health insurance has become a priority for us. As you can see that a number of diseases are spreading with a rapid pace, so having health insurance has become extremely important. There are certain states that have mandated health insurance for their residents. One might have to pay tax penalty for not being enrolled in health insurance. According to affordable care act, a person who can afford a health insurance, but chooses not to purchase must have to pay a penalty, which can be called the individual shared responsibility payment.
The penalty is designed to protect people from skipping out on health insurance. There are a lot of people who are not being able to pay off their medical bills in event of severe injury and illness. For them, having a health insurance is mandatory. There is a tax penalty for being uninsured.
How’s tax penalty applied is you don’t have a health insurance?
Your penalty is calculated in two ways –
- It can be the percentage of your annual income.
- It can be a flat fee penalty per person & adults being charged higher fee than children.
Whichever the option is, you’d have to pay a higher penalty. The percentage of penalty fee may change every year, so it’s best to have insurance and be financially safe from penalties and huge medical bills.
Breakdown of fines for insured people from 2015 to 2019
- 2015 – If an adult was not insured, he was liable to pay 2% of total annual income or $325. The amount would be $162.50 for each child.
- 2016-2018 – During this period, if an adult was not insured, he was liable to pay 2.5% of total annual income or $695. The amount was $62.50 per each child under 18. The maximum penalty per family was $2085.
- 2019 – The penalty for not having health insurance was removed, but those who were uninsured in 2018 paid penalty.
After 2019, the shared responsibility payment doesn’t apply longer.
Benefits of health insurance
So, instead of paying these penalties, you should always get insured and protect yourself from financial and health risks. There are many benefits of having a health insurance, like –
- Health insurance covers treatment of expensive illnesses and accidents. So, it protects you from high medical bills.
- You can keep yourself and your family financially ready after having a health insurance policy.
- You get free preventive treatment and care like vaccination, screenings, tests and checkups.
- Amounts paid in health insurance premiums are eligible for tax benefits.
- You get ambulance coverage, surgery coverage under health insurance.
When you are buying a health insurance, make sure that the treatment of severe illnesses and surgeries is covered. Always get a health insurance from trusted service provider. You can buy the health insurance at any stage of your life, but if you buy it at an early age, you’ll get maximum benefits.