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

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:"

1 comment:

  1. Awesome post you have here! A very helpful one. We should be very careful when selecting health care plans. Anyway, Thanks for sharing!