Refusing Health Care Coverage? Be Prepared to Pay
Individuals earning below the tax filing threshold of $10,150 will not pay a penalty. Others earning above $10,150 will pay based on earnings over the tax threshold of $10,150.
For taxes filed for the year 2014:
- Individuals earning between $10,150 and $19650, there is a flat penalty fee of $95 per adult (47.50 per child under 18). Thus, a single adult making $19,000 would pay $95 (1×95); a family of two adults at $19,000 would pay $190 (2×95); and a family of one adult and one child at $19,000 would pay $142.50 (95+47.50). The maximum penalty per family with a household income below $19,650 is $285.
- Individuals earning above $19,650, will be required to pay a penalty equal to 1% of their annual income. For example, a single adult employee earning $40,000 per year would be required to pay $400 (40,000×1%). Whereas, a family of six with two adults each making $50,000, the total income would be $100,000. Therefore the family would pay $1,000 (100,000×1%).
The maximum penalty for 2014 is $2,448 per individual annually, which is 1% of a yearly income of $244.800. Earnings above that for individuals are capped at the individual maximum penalty.
The maximum family penalty issued by the IRS was $12,240 for a five-member family, and will only impact households with a combined yearly income of $1.2 million or more.
*Remember these penalty rates are only for the year 2014, and will increase in 2015 and beyond. The 2015 penalties will be the greater of $325 per person or 2% of total income. 2016 Rates will rise further to the greater of $695 per person or 2.5% of total income. The years following 2016, the penalty rates will be adjusted according to inflation.
Call HR Strategies today for assistance! 770-339-0000 or visit our website at www.hr-strategies.com.