Important Info on the Opt Out Penalty

The fee for not having health insurance in 2016

The fee is calculated 2 different ways – as a percentage of your household income, and per person. You’ll pay whichever is higher.

Percentage of income:

  • 2.5% of household income
  • Maximum: Total yearly premium for the national average price of a Bronze plan sold through the Marketplace

Per person:

  • $695 per adult
  • $347.50 per child under 18
  • Maximum: $2,085
[You should be able to start signing up for Obamacare again around Nov 15th 2016; in some cases, you can sign up sooner. Small businesses can also sign up now. Info here.]

Important Info on the Opt Out Penalty:

It's sometimes called the "health insurance penalty," "fine," "individual responsibility payment" or "individual mandate."

If you are required to get health insurance, and you don't have what the government calls "minimum essential coverage," you have to pay the penalty.

See below to learn if you can avoid the penalty:

Obamacare Opt Out Penalties

Obamacare Opt Out Penalties
Source: Kaiser

Sunday, April 24, 2016

Who's Opting Out of Obamacare in 2016?

"People, like Mr. Murphy, who earn too much to qualify for federal subsidies that defray the cost of coverage may be most likely to opt out. A recent analysis by the Kaiser Family Foundation found that more than seven million people who are eligible for exchange coverage would pay less in penalties than for the least expensive insurance available to them. More than half would not qualify for subsidies, the analysis found."

Sunday, November 2, 2014

Apply for Obamacare Exemption Now to Avoid Tax Nightmare Next April

"Some math may be required: If the exemption covers only a few months of the year, the individual is responsible for calculating how much of the penalty he or she will owe. The process brings up a number of problems, the first being a time crunch. The marketplace is now taking about two weeks to process exemption applications, according to H&R Block. Many fear it will take much longer during tax season, particularly because the entire process is manual. Given how most people wait until the last minute to do their taxes, there is concern delays could push beyond tax day, April 15." Read more:

Friday, June 13, 2014

Millions of Low Income Americans to Pay Obamacare Opt Out Penalty

"Roughly one million low-income Americans will pay a fine under Obamacare (in 2015), according to the Congressional Budget Office (CBO).

The CBO estimated that four million people would pay the individual mandate penalty for not having health insurance by 2016 as a result of the president’s health care law, according to a report released last week,

'All told, CBO and [the Joint Committee on Taxation] JCT estimate that about four million people will pay a penalty because they are uninsured in 2016 (a figure that includes uninsured dependents who have the penalty paid on their behalf),' the report said. 'An estimated $4 billion will be collected from those who are uninsured in 2016, and, on average, an estimated $5 billion will be collected per year over the 2017–2024 period.'”

Check out the other posts on this blog for ideas on how to deal with opting out of Obamacare.

Thursday, January 2, 2014

Opt Out & Buy Your Own Insurance: One Suggested Strategy

Many Americans have found that Obamacare costs too much, has excessive out-of-pocket payments or doesn't let them keep the doctors and/or hospitals they like.

It may make financial sense for some of these people to pay the health insurance penalty (which is relatively low the first year), then buy an insurance policy that's good for them, but does not meet Obamacare's "minimum essential coverage."

The key here is to make sure you understand how much Obamacare will cost you "all in," including what you can expect to owe for out-of-pocket deductible payments (or co-pays). For some people, it's cheaper or better to pay the opt out penalty plus the premium for uncovered insurance. For others, especially those who get subsidies and older people, Obamacare may be cheaper.

"Some health insurers are offering health plans that do not meet Obamacare standards, apparently because they believe there is an opportunity to provide at least some coverage to millions of Americans who refuse to buy an Obamacare plan.

Some pundits and the media have stated or implied that it is illegal for health insurers to sell coverage that does not meet the Affordable Care Act’s “essential benefits” (i.e., things it must cover).

It’s not illegal; insurers are free to sell non-qualified coverage, subject to state insurance department approval.

However, a person buying non-qualified coverage would still have to pay the Obamacare health insurance penalty (or tax) for not having the kind of coverage President Obama approves of—what he likes to call “substandard coverage,” but which many others call affordable.

Assurant is one of the largest insurers for the individual (i.e., non-group) market. It has long offered limited policies, and still does, even with Obamacare’s mandate to have qualified coverage breathing down its neck. It’s Health Access fixed-indemnity product—which means it pays a fixed amount of money rather than a percentage of the medical bill—costs $94, $159 or $249 a month for a 50-year-old male, depending on the coverage options a person chooses:"

Tuesday, November 12, 2013

The Government Didn't Talk Much About the Opt Out Penalty in Its Obamacare Ads

"But there is also the dirty little secret of the penalty: It is a bit of a chimera, because the federal government cannot use its usual tools like fines, liens or criminal prosecutions to punish people who do not pay it. The penalty is supposed to be reported and paid with the income tax returns of those who do not buy insurance, but the government has not said how it will collect from those who owe it but do not pay it, though the law allows it to deduct from any income tax refunds."

Monday, October 28, 2013

Life Insurance with Med Payments May Be a Strategy to Opt Out: Forbes

One strategy for Obamacare Opt Out Penalties/Health Insurance Penalty: 

"Along with life insurance coverage the policy includes what’s called a 'critical illness' component. If the policyholder needs, say, surgery, the insurer writes the policyholder a check based on a schedule. Let’s say, for example, it’s $10,000. The policyholder has $10,000 in hand to pay for the medical care — or, frankly, anything else since the money belongs to the insured — but the value of his life insurance benefit is reduced by the same amount, to $240,000. Thus the critical illness component simply accelerates the benefit payout..."Use Life Insurance to Opt Out of Obamacare