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Tax Penalty for Non-compliance

Does anyone know how partial penalties are assessed? I was between jobs for a total of 4 months last year. The gaps between jobs were each about two months long. I know that three months or more of no insurance is supposed to be a penalty, but is that three months total in the year or months in a row?


  • You'd have to research into that. I'm sure you can find that online. I'd think it'd be in the year, but who knows? It's the government we're dealing with here.

  • I'm sure that a tax or insurance professional can tell get you the right answer. It's a confusing bill and the IRS will  have to find a way to verify insurance coverage (which sounds like a HIPPA violation to me). Be careful how you report your coverage. Your employers are going to be required to report also.  The government will have a true mess on their hands this year. A good case of be careful what you wish for if you ask me.

  • Hi Jansom. I'm a licensed agent. If you have a gap in coverage of less than three months you can claim an exemption for the tax penalty. However if you have more than one gap in coverage then you can only claim an exemption for the first gap in coverage. The tax penalty would be pro rated based on how many months you did not have coverage. I hope that helps.

    If you need help with looking into options for your health insurance feel free to call or email me.

    Lee Daigle
    CA License 0H63288
  • In 2015 it rises to the greater of $325 or 2 percent of income. For 2016, it's listed as $695 or 2.5% of the household income (whichever one is higher). 
  • Having to pay a penalty for not buying into this insurance is against our right as an American. Since when has any president managed to tell the people of this nation that they will be forced to buy a product? That is not the land of the free. Obamacare needs to be done away with. You shouldn't be penalizes for not being able to afford what is y consider affordable health care! What is the government going to do when there are millions of dollars owes in tax penalties and tax warrants issues for all these people.
  • Posts: 33
    So true. I can't even get the insurance because they refused to allow me to pay with my checking account after telling me to send a voided check to pay. They returned it and said I could not pay until I had paid my balance "in full". As this was the first payment, I never had a balance.

    Of course, they lied about the penalty too. Originally, it was never to be a percentage, but a flat $90 fee. They changed this, of course, because they are all lying scumbags.

    The second year, I tried again and they claimed I did not qualify for the assisted policy thing when absolutely nothing had changed in my situation. They wanted me to pay $468 a month with a $6500 deductible. If you do the math, that is about $1010 per month I have to pay and still do not get any benefit from the insurance. This is at least half my income after taxes, with is B.S. I canceled the "policy" on the phone and immediately hung up and went back to their website and guess what? Now I was again qualified for the "assistance" program. Shows just how screwed up the whole thing is.

    The whole assistance thing is being funded by people like me that they either soak for $1000 month for absolutely zero coverage (reality) or fine us to pay for the other people who can get more reasonable rates.
  • I too tried to sign up for this Obamacare just to see if I could get better rates. My deductible was right up there with your rate Te5la. There was no way I could ever afford this healthcare with what I make in a month. I would literally be working just to pay the insurance premiums. I decided that taking the penalty would be cheaper than having insurance, until this past year doing my taxes and seen the penalty was almost triple with what we originally thought it was going to be. I can kiss any type of tax refund in the future goodbye.
  • Posts: 56
    thash1979, I sure hope you will do the honorable thing for the taxpayer & insurees and simply die when you get a serious medical condition, rather than go to an emergency room and run up a big bill that ends up not getting paid because you file for bankruptcy, etc.
  • It's awful when Americans are forced to take a penalty because it's cheaper than the insurance they are forced to carry. I mentioned in another post aca has a lot of bugs to work out. I think it shouldn't have been mandatory for a longer period of time or should have just been given a trial run to see how it affected the American people.
  • Oh god. We had a similar discussion.  After my husband lost his job (and thereby our insurance), we were looking between paying insurance out of pocket or just paying the penalty.  We are both 100% healthy and did not feel we need insurance.  It turns out the penalty is a lot cheaper than most of the plans available.  In the end, he was offered another job and we were able to have the insurances sync up.  
    I think it is just deplorable that we are now forced to have insurance or you are fined.  Is it not our own right to be uninsured if that is the route we want to go? 
  • Posts: 70
    This is really the one area that I think I have the most doubts when it comes to the overall effectiveness of the program.  Historically, policy tools that focus on tax penalties do not often have the intended effects, and that is mostly due to a lack of regulation and follow through with the threats or penalties.  That is just what I have and read, but I do believe it, and I do think that we will see much of the same when it comes to the ACA.
  • Posts: 6
    My son is 23 and single. When he went to file his taxes in February, the person who prepared his taxes told him that based on his income, the penalty would be cheaper than the premium he would have to pay. 

    He still got a refund, and since he's in relatively good health, he hasn't felt like he was penalized at all. I still wish he could get health care through his employer, but he's only working part time and they are under no mandate to provide for part time workers.
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