In the year 2016, the Affordable Care Act penalties will be in full force. It will be a penalty of $695 per year, per adult, and half that per child. For a family of four, the penalty will be $2,085 per year. Or 2.5% of your household income, whichever amount is higher. Keep in mind that any money earned by your children is counted as part of the household income.
The Affordable Care Act
When you file your tax return at the end of the year, there will be a box asking if you had the required amount of health insurance for the year. If you did, everything goes as usual. If you didn’t have the required amount of coverage, the penalties will apply.
So far the only method of enforcement of the penalty is that any tax refund will be deducted. If you are not expecting a refund, there currently is no method in place to enforce the penalty. The Affordable Care Act statute prohibits the government from imposing any sort of criminal penalties:
- They cannot impose a levy against your property.
- They cannot put a lien against your property.
- The penalty would just remain an outstanding obligation to the IRS.
However, always another, however, the Supreme Court has recently decided that the shared obligation of health care costs as addressed by the Affordable Care Act can be legally construed as a tax. It is then possible the IRS could use normal legal means to collect the penalty such as levies and liens on your property. At that point, it will also affect your credit score.
All these rules and regulations will remain “moving” targets for the next several years. Please stay alert for any updates. And always feel free to contact any of our independent insurance agents here at Insurance Advisors of St. Louis.