Penalty...Anyone Figure this Out?

[TonyC]

What will be the actual penalty if someone doesn't have an ACA policy in place by jan 2014?

I heard, but have not read that the penalty will be 1% of the gross income.

Seems to me the only ones who will be concerned with this will be those who make 200k or more?

Whats your take on this?

 

[leevena]

Very simple.

2014-higher of $95 per person or 1% of taxable income, whichever is greater.

2015-higher of $325 per person or 2% of taxable income, whichever is greater.

2016-higher of $695 per person or 2.5% of taxable income, whichever is greater.

Thereafter, it is adjusted annually for cost of living.

There is a cap of 3 per person.

 

[taterpeeler]

the biggest concern should be the fact the client is locked out of securing a plan until jan 1 2015. the penalty is nothing but locking you out from protecting your family is strong....

if you have a wife and kids its your moral obligation to protect them... right now clients had options to buy any month.

also, the aca has provisions in it related to the reduction of funding to the county health providers or some call them govt health hospitals. there was a reduction in funding to help offset the cost of the aca. read an article about 2 weeks ago indicating that there may be fines involved if these providers treat an over abundance of charity cases... I don't have the article, it was up when I was at a swimming pool party and then when I came home it had vanished....

 

[TonyC]

the biggest concern should be the fact the client is locked out of securing a plan until jan 1 2015. the penalty is nothing but locking you out from protecting your family is strong....

if you have a wife and kids its your moral obligation to protect them... right now clients had options to buy any month.

also, the aca has provisions in it related to the reduction of funding to the county health providers or some call them govt health hospitals. there was a reduction in funding to help offset the cost of the aca. read an article about 2 weeks ago indicating that there may be fines involved if these providers treat an over abundance of charity cases... I don't have the article, it was up when I was at a swimming pool party and then when I came home it had vanished....

Are you saying that you will not be able to purchase a qualifiable plan mid-yr?

 

[Ann H]

Are you saying that you will not be able to purchase a qualifiable plan mid-yr?

Not without a Special Enrollment Privelege (SEP).

----------

What will be the actual penalty if someone doesn't have an ACA policy in place by jan 2014?

I heard, but have not read that the penalty will be 1% of the gross income.

Seems to me the only ones who will be concerned with this will be those who make 200k or more?

Whats your take on this?

The penalty is the greater of a dollar limit or percentage, maxed at the national average cost of the bronze plan for your family makeup.

1. Dollar calculation

* In 2014 it is $95 for each adult, half that for kids.
* The dollar calculation is maxed at 3x's the adult dollar amount.
* So, in 2014 the dollar calculation is maxed at $285 ($95 x 3 = $285)​

2. Percentage calcualtion

* In 2014 it is 1% of MAGI
* MAGI for the penalty is AGI plus foreign income and tax-free interest. MAGI for the penalty doesn't include the taxable portion of social security benefits like MAGI for calculation of the subsidy does.
* You subtract out the tax-filing threshold first before calculating the 1%.​

3. Pick which one of the penalties above is greater, and that's your penalty.
4. But it's still capped at the national average cost of the bronze plan for your family makeup.

The penalty dollar calculation and percentage calculation go up annually through 2016, like stated in the post above by Leevena. The penalty is applicable to everyone listed as a dependent on the taxpayer's tax return who does not carry at least Minimum Essential Coverage (MEC) for at least 9 of the 12 months of the tax year. The penalty is calculated per month, but is charged for the whole year when you file your tax return. The IRS is not allowed collection enforcement for the penalty, but if you have a tax refund, they will deduct the penalty amount from your refund.

 

[taterpeeler]

Are you saying that you will not be able to purchase a qualifiable plan mid-yr?

that is exactly what im saying... examples of SEP are divorce, marriage, death, moving out of service area like mapd plans... loss of other coverage like job loss and substantial financial changes

 

[TonyC]

that is exactly what im saying... examples of SEP are divorce, marriage, death, moving out of service area like mapd plans... loss of other coverage like job loss and substantial financial changes

....so this is going to be run like Medicare "open enrollment?"

...sounds like a fiasco for those doing Medicare n Indy!

...also sounds like business will be slow during the enrollment period for health agents

...Jesus!