Payments of Penalties for Being Uninsured Under the Healthcare Bill

Starting in 2014, the Patient Protection and Affordable Care Act requires most United States residents to obtain health insurance and establishes a penalty for being uninsured. Here are several important facts about the law and its requirements:

  • The penalty will be the greater of a flat dollar amount per person that rises to $695 in 2016 and is indexed by inflation thereafter (the penalty for children will be half that amount and an overall cap will apply to family payments) or a percentage of the household’s income that rises to 2.5 percent for 2016 and later years (also subject to a cap).
  • It is estimated that about 21 million nonelderly residents will be uninsured in 2016, but most will not face the penalty.
    • For instance, unauthorized immigrants are exempted from the requirement to obtain health insurance.
    • Others will be subject to the requirement but exempted from the penalty (i.e., because they will have income low enough that they do not have to file an income tax return, because they are members of Indian tribes, or because the premium they would have to pay would exceed a specified share of their income).
    • Individuals may also be granted waivers from the penalty because of hardship and may be exempted from the mandate on the basis of their religious beliefs.
  • Of those who are subject to the penalty, many will voluntarily report on their tax returns that they are uninsured and pay the required amount. Still, others will try to avoid making payments.
  • Thus, the estimates presented here take into account probable compliance rates, as well as the ability of the IRS to administer and collect the penalty.
  • In total, about 4 million people are projected to pay a penalty because they will be uninsured in 2016.  This includes uninsured dependents that have the penalty paid on their behalf.

© 2010 Parsonage Vandenack Williams LLC

  For more information, contact

Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s