2014 is the first year most Americans will have to either have health insurance or face a tax penalty.
But most people who are aware of the penalty think it’s pretty small, at least for this first year. And that could turn into an expensive mistake.
In fact, “the penalty is the maximum of either $95 or 1 percent of taxable income in 2014,” according to Linda Blumberg, a senior fellow at the Urban Institute’s Health Policy Center. “For people with higher incomes it can be much more sizable than $95.”
Blumberg says that even for people with more moderate incomes, it’s important to remember that the flat fee penalty will be assessed for every family member who lacks health coverage.
“So if it’s a two-adult household and both are uninsured, it’s twice $95; $190,” he says. “Then if there are any children in the family that are uninsured, the penalty for each of them is half of the $95.”
If you’re uninsured and earn enough to be potentially liable for penalties, you have to sign up for coverage by the end of this month in order to avoid them.
Full article here.