What Happens if You Don’t Have Health Insurance

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Nowadays it is the law to have health insurance. Many jobs offer employee benefits that include individual health insurance. Places like medicare will offer insurance to those who can not receive healthcare through their employer and to the unemployed.

If you do not have health insurance, you will have to pay a fee. This fee is called the individual shared responsibility payment. You will have to pay the penalty for any month you or your dependents went without health insurance. Not only that but you must ensure that the individual health insurance that you do have qualifies as at least the minimum coverage. The fee will be due when you file your taxes for the previous year. There are a few cases in which the individual can get a exception from the insurance mandate. There are certain life events or financial status and other reasons that may qualify you for an exemption.

The penalty is usually calculated by either:

  1. 2.5% of your total household income. The maximum totals out to be the yearly premium of a low grade insurance plan’s average amount.
  2. Based off your personal income. This is usually around $695 per adult and $347.5 per child which a maximum cap of $2,085.

Whichever comes out to be the higher amount is what you will have to pay when the time comes.

Keep in mind that even if you were covered for only one day during a particular month, you are considered covered and are not required to claim that month as uninsured. Generally speaking, even if you are not covered for a month or two, who will be pardoned from the penalty fee.

If the fee is not paid by the time you get your return, the IRS will withhold the amount that you owe from your tax return and any future tax refunds depending on how much you owe, but there are no other penalties for not paying the fee.

Individual health insurance will be monitored because employers will have to report any information about who they have covered and not covered. The employer is only responsible for offering insurance and reporting it but not for the individuals who choose not to participate or take advantage of the offer of benefits.

The exemptions mentioned earlier include:

  1. If you are uninsured for less than 3 months in one calendar year.
  2. Insurance costs more than 8% of your total income.
  3. If you are not planning to file taxes because income is too low.
  4. Religious rights prohibit you from obtaining healthcare.
  5. You are not in the United States.
  6. If you are able to get a hardship exemption which includes homelessness or eviction, having received a shut off notice of utilities, and other reasons.

    If you do not fall in one of these categories, your best bet is to just take advantage of the health care. You may qualify for a cheaper premium somewhere else, so just look around and find out what will work best for you and your family.

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