Some obstacles prevent people from buying health insurance, and the authority is trying to tackle this issue by implementing the Affordable Care Act (ACA). The benefits come with insurance coverage. Because of that, United States taxpayers owe individual payments when filing their taxes. The act enforces health insurance on every US taxpayer except for an exemption. An unqualified person who dodges health insurance for up to three months attracts a penalty on the next tax return.
How much does the ACA cost?
The law has two ways to fix the problem. You can pay a percentage of the annual tax return, gross household income, or flat charges, whichever is higher. The tax return can be used to calculate the percentage of the penalty. Each year of delay in paying the penalty attracts extra charges due to inflation. In 2016, the tax charges increased by 2.5% of gross household income. You can pay $695 as an adult or $347.50 if you're a child, limited to $2085. The rate remained at 2.5% in 2017 but remained under the influence of inflation.
You can prevent the penalty of not having health insurance through Healthcare.gov. The site has the plans and prices; it can also redirect you to the state marketplace in your area. You can register under the ACA for the coming year but only extend it for some months. Aside from that, you must be qualified to register for a life event such as divorce, birth, or marriage. You can also use your employer, Medicaid, or private insurer to get coverage.
Anyone with no insurance cover will be penalized, but due to some exemptions, people can stay without the coverage or stay for a few months without being penalized.
Exemptions from the ACA penalty
People exempted from health insurance coverage under the ACA are not under any obligation or penalty. The coverage may be compulsory, but not for every citizen. The exemption can be for many reasons, and here are a few.
The income of the household is lower. A household that pays up to 8% on health insurance coverage is exempted.
If a person remains uninsured for more than three months in a year
The taxes do not apply to you if you have a low income.
A Native American or someone under the Indian Health Services who is qualified for health coverage is exempted.
Some people's religions do not accept insurance.
If you're locked up
Someone that is already under health coverage in the ministry
If you have lived abroad for over a year
If you're affected by hardship such as bankruptcy, homelessness, eviction, or other similar circumstances, which are available on the website.
You can check if you qualify for this exemption through the website. Then file the tax return on Healthcare.gov if you're exempted. It will save you from many conditions or penalties if you know where you belong. If you're not exempted and haven't paid the penalty, make sure you file it during the next tax year. You can pay online or through the office or other authorized dealers. But first, you have to register for the next enrollment program. Check your health insurance coverage and the penalty attached to prevent sad situations.
Bottom line
If you have difficulties paying the penalty for Obamacare from your 2018 taxes, the IRS will deduct the penalty from the refund or credit that belongs to you. However, you will receive a notice from the IRS concerning these deductions. Remember that every delay accumulates interest on the penalty, just like unpaid taxes. According to law, you may be exempted from the 2019 penalty, but more unpaid debt will accumulate from previous years.
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