Penalty for not having health coverage…Individual Mandate…Obamacare tax…Shared Responsibility Payment — No matter what you call it, there has been some confusion over whether or not it still exists.
On December 22, 2017, President Donald Trump signed a tax bill that, in part, repeals the tax penalty for not having health coverage. However, that will not go into effect until 2019.
So, if you did not have health coverage in 2017 and/or you don’t have it in 2018, you are still on the hook for the penalty at tax time unless you qualify for an exemption.
“Uh, no! I dropped my coverage because I didn’t think I’d have to pay the penalty this year! I checked the exemption requirements & I don’t qualify for one. What do I do now?”
Well, friend, you’re in a tough spot because the rules about WHEN you can apply for health coverage still apply. You can only enroll for coverage through the Marketplace during Open Enrollment each year (Nov. 1 — Dec. 15) or if you qualify for a Special Enrollment Period. Other insurance options include getting covered through a group coverage at work, becoming eligible for Medicaid/Chips, or having coverage through a faith based health coverage, such as a Medi-share plan. (If you decide to look into a Medi-share plan, DO YOUR RESEARCH!) Please note, however, that most short term plans will not protect you from the tax penalty.
“How much will my penalty be?”
The penalty is currently $695 per adult and $347.50 per child OR 2.5% or your household income, whichever is greater. Depending on your situation, the penalty may cost you more than the health coverage would have cost. Check with your tax professional if you have questions about your specific situation.
As always, I would advise that you do your research or check with a professional before making decisions about your insurance coverage. The laws surrounding healthcare & health insurance in our country are changing and we expect more changes to come. Be sure to check back here or give us a call if you have questions!