New Obamacare Fine Might Be Steeper Than You Think

Advertising Disclosure: When you buy something by clicking links on our site, we may earn a small commission, but it never affects the products or services we recommend.

Image Not Available

The average fee levied on people who fail to buy health insurance for 2016 is projected to rise 47 percent to nearly $1,000 per household, according to a new analysis released by the nonprofit Kaiser Family Foundation on Wednesday.

This fee, also referred to as a fine or penalty, stems from the requirement that individuals obtain health insurance under the Patient Protection and Affordable Care Act, the federal law also referred to as Obamacare.

According to the federal government’s website, people who can afford insurance but don’t buy it must pay the fee unless they are exempt. The fee is being phased in over three years, beginning in 2014.

For people who go uninsured in 2016, the fee will be the greater of two amounts, the website states:

  • Flat fee of $695 per adult and $347.50 per child (up from $325 per adult and $162.50 per child for people who went uninsured this year). The maximum size of this penalty is $2,085.
  • 2.5 percent of household income (up from 2 percent for people who went uninsured this year). The maximum size of this penalty is an amount equivalent to the yearly premium for the national average price of a Bronze plan, the cheapest/lowest plan available through the federal health insurance exchange.

People who are eligible for financial assistance face a smaller average household fee of $738 for going uninsured next year, according to the Kaiser Family Foundation analysis. People who are ineligible for subsidies to help pay the cost of insurance — and who tend to have higher incomes — face a larger average household fee of $1,450.

Because ACA fees are paid upon the filing of federal tax returns, people who go uninsured in 2016 might not learn exactly how much their 2016 fee will amount to until April 2017.

The open enrollment period for 2016 insurance plans is underway and will end Jan. 31. However, you must purchase a plan by Dec. 15 to guarantee coverage by Jan. 1.

If you have not yet enrolled in a plan for the new year and wish to avoid the fee, check out “Obamacare Open Enrollment Is Coming: 5 Things You Need to Know.”

Have you obtained health insurance for 2016 yet, or do you plan not to purchase it? Let us know below or on Facebook.

Get smarter with your money!

Want the best money-news and tips to help you make more and spend less? Then sign up for the free Money Talks Newsletter to receive daily updates of personal finance news and advice, delivered straight to your inbox. Sign up for our free newsletter today.