Feds cap fines for not buying health insurance

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MIAMI (AP) — Federal officials have capped the amount of
money scofflaws will be forced to pay if they don’t buy insurance this
year at $2,448 per person and $12,240 for a family of five.
The
amount is equal to the national average annual premium for a bronze
level health plan. But only those with an income above about a quarter
of a million dollars would benefit from the cap. Those making less would
still have to pay as much as 1 percent of their annual income.
The
penalty for the first year starts at $95 per adult or $47.50 per child
under 18. The penalty for not buying insurance increases to 2 percent of
income or $325, whichever is higher, for 2015. The fines are due when
people file their 2014 taxes.
The figures, released late Thursday,
are important because the White House has only provided theoretical
caps in the past. Conservative lawmakers and groups that are critical of
the Affordable Care Act encouraged consumers to skip buying insurance,
arguing it would be cheaper to pay a $95 penalty, but often failed to
mention the 1 percent clause.
The uninsured will owe 1/12th of the
annual payment for each month they or their dependents don’t have
either coverage or an exemption, according to the IRS.
Federal
researchers predict that about 4 million people, including dependents,
could be hit with fines by 2016. The Congressional Budget Office had
previously projected 6 million would pay fines, but dropped the estimate
because more people will be exempt from the law, partly due to changes
in regulations.
More than 8 million people signed up for insurance
under the Affordable Care Act and many Americans already had insurance
through their employers and were not affected by the fine.
If
someone is due a tax refund, the IRS can deduct the penalty from the
refund. Otherwise, the IRS will let people know what’s owed or hold back
the amount of the penalty fee from future tax refunds, but there are no
liens or criminal penalties for failing to pay.
Some residents,
including prison inmates, are exempt from the penalties and others can
file for hardship conditions. If people don’t earn enough money to have
to file a federal tax form, they don’t have to buy coverage. The
threshold for filing a federal tax return is $10,150.
Premium
prices vary widely based on age, gender and zip code so the premium for a
bronze plan in South Florida could be much different than the cost of a
bronze plan in Kansas.

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