Penalty for No Health Insurance 2018 - Affordable Health Plans

The health insurance penalty has been a hot topic since it was introduced with the Affordable Care Act in March of 2010 with the implications affecting Americans from every social tier. To summarize the issue, the Affordable Care Act or the ACA requires Americans to purchase health insurance, but it should be noted that not every single person that signed up kept their coverage. In some cases, it was an issue of poverty, and in others, it was a case of individuals who did not believe that they needed health insurance coverage to the extent required by the ACA. As a result of that, in 2018, there is a strong chance that millions of Americans will owe a tax penalty, often referred to as the ‘Obamacare Penalty’

Who is Affected by the Obamacare Penalty?

There is a common misconception that dropping your insurance will immediately cause you to incur the Obamacare Penalty, but the act states that you will need to go for a consecutive three months without health insurance. Something important to keep in mind is that going without insurance for a single day will count for the entire month, which is why it is very important to not let the insurance lapse.

Estimating the Cost of the Health Insurance Penalty

The penalty for lapsed health insurance in 2018 will be calculated in one of two ways:

  • The tax penalty is 2.5% of your household gross adjusted income
  • The tax penalty is dependent on the following:
  • $695 per Adult
  • $347.40 per Child
  • Maximum of $2,085 per Household

Rates Unclear for 2018

There have been many questions surrounding the potential tax penalty for the year 2018 but as of right now, there is no update. The new tax bill does not eliminate the fee incurred by the Affordable Care Act until 2019, which means those without insurance could still face a penalty, and it is expected to increase. Something important to note is that those who fill out their own tax forms will not see a rejection if they fail to indicate whether or not they had health insurance for the year, but the IRS may follow up and perform an audit to get the information they need from you.

Exemptions to the Penalty

Health-Insurance-2018There are some individuals that qualify for an exemption under the ACA which means that they aren’t going to be charged a penalty for not having any sort of health insurance coverage. You will not need to pay a fee if any of the following apply to you:

  • Coverage is greater than 8.13% of your household income
  • Uninsured for less than three months
  • Native American or Insured by an Indian Health Services Provider
  • Poverty
  • Incarceration
  • Religious objections
  • Abroad for more than one year
    • Hardship
    • Homelessness
    • Bankruptcy
    • Eviction
    • Etc

If you have reason to believe that you might qualify for an exemption under the ACA, you will need to claim it when you file your tax return. You can also apply for it directly on the website.

Potential Elimination of the Penalty

With the new healthcare bill going into effect, there is a chance that we could see the end of the fee, but it does not eliminate it until 2019. That being said, you should hold off on canceling your healthcare until the change is announced. As of right now, the penalty is still significant and still quite problematic.

Fewer Options in the Coming Days

One of the greatest side effects of eliminating the fee will be the lack of options available on the ACA website. As people are no longer compelled to purchase insurance packages you will find that there are not quite as many options sitting there, ripe for the picking. This may only be a temporary problem or it could be lingering for many years to come.

There are some major changes coming in 2018 and we’re not entirely sure what the scope will be. If you navigate to the ACA website you will find that they have not stated all of the information, and as we stated before, there is a good chance that the rates are going to raise significantly for 2018 ( What we do know is that there is light at the end of the tunnel, at least for the millions that have been affected by the imposition of the ACA fee over the last eight years.

As we find ourselves endowed with more information we’ll be sure to pass it along to you and make sure that you are in the know when it comes to your potential health insurance options. Not everyone needs to be covered and soon enough, you’re going to have freedom of choice again.


Previous Post
Newer Post

At vero eos et accusamus et iusto odio digni goikussimos ducimus qui to bonfo blanditiis praese. Ntium voluum deleniti atque.

Melbourne, Australia
(Sat - Thursday)
(10am - 05 pm)