What Happened to You at Tax Time if You Didn’t Have Health Insurance?

Lawyers in Greenville South  CarolinaSo, are you wondering what exactly is the truth about what happen to any of us that didn’t have medical health insurance at the end of 2014? We recently sat down with some lawyers in Greenville SC and discussed this hotly debated subject.

As of last year on January 1, 2014 the effective date and the deadline for most of us in the US to obtain medical health insurance as required by the new health care laws without facing a penalty has passed. What are the penalties being imposed on those of us who didn’t decide or “wouldn’t decide” to carry the new insurance?

For those that didn’t the new rules dictate that you should have incurred a penalty of the greater of: $95 for each individual in your household or 1% of your total household income. (But remember- it’s not a tax!). Over time, those “non-tax” penalties are scheduled to increase and by the physical year 2016 the amount is going to be at minimum of $695 per person in your household or as much as 2.5% of your total household income. And yes, the IRS is collecting this just like it does the other taxes but calling it an assessment penalty.

But, there are a few exceptions to the rules laid out in the guidelines of the new law: (for more info visit: http://greenvilleattorneygroup.com

  • If you are temporarily unemployed and your insurance was cancelled by your previous employment
  • temporary staffing agency do not have to supply insurance coverage and you are exempt
  • If you are a part of an excepted religious organization that is opposed to insurance on the grounds of their religious beliefs
  • If you income is below the point required by the IRS to file a personal income tax return
  • If you do qualify for Medicaid, but reside in a state that has “opted out” and have enacted state legislation opposed to inclusion in the expanded program such as, Pennsylvania, Texas or Wisconsin. Pennsylvania, or Wisconsin.

Final Regulations outlined in the law also have information about what the minimum required coverages and exclusions and inclusions are, and lay out distinct responsibilities on how individuals are to provide for their dependents (spouse, children and anyone you claim as a dependent on your taxes most likely qualify under the rules).

So, what-ever side you stand on this controversial new insurance mandate these penalties (not taxes) are real and implementation and collection of the “assessments” has been implemented.

Whether you agree with the controversial individual mandate or not, the penalty is real and implementation is fast approaching.

If you’d like a full version of the final regulation just click here: IRS final regulations