About half of all enrollees in Obamacare’s Health Insurance program are expected to owe money back to the government as a result of underestimating their annual income. This is a result of the Tax consequences tied to the Advance Premium Tax Credit or APTC. The average payback is $530 and reduces the average tax refund 17% .
Under APTC , those who make more than 100% of the federal poverty level (since anything below this is covered by Medicaid) but less than 400% of the Federal Poverty Level – have to estimate how much they expect to earn in the upcoming year. The estimate is then used to calculate how much of a subsidy will be paid out by the individual’s home state via the federal government. This makes it difficult for hourly paid workers due to overtime, bonuses, a promotion, etc.
If you made less than you estimated it means a refund, but if you made more than estimated you could owe money back to the government.
For those people who chose not to purchase health insurance in 2014 the average penalty was to be the greater of $95 or 1% of their modified adjusted gross income. Average penalty for last year was $178. This penalty increases in 2015 to 2% of your or annual household income or $325 whichever is higher( $162.50 per child under 18) with a maximum penalty per family of $975.
In 2016 if you don’t have coverage you will pay the higher of these two amounts 2.5% of your annual income or $695 per person ($347.50 per child under 18)
STILL NEED COVERAGE FOR 2015?
The open enrollment period for 2015 is over. You can still get coverage if;
- You qualify for a Special Enrollment Period due to a life changing event like marriage, having a baby, or losing other coverage
- Through Medicaid and the Children’s Health Insurance Program which provide coverage to families and individuals with limited income or other reasons
If you would like more information or would like to see if you can get coverage in 2015 contact our office