If you’re a relatively healthy individual, you may find yourself occasionally asking, “Do I even need to have health insurance?” Don’t be foolish though—having health insurance is incredibly important, not to mention it’s the law!
A health emergency can be expensive. A hospital stay in Washington state can costs as much as $3,000 a day!1 Aside from unplanned emergencies, health insurance provides you with a wealth of preventive services that will help you maintain your health and well-being long-term.
Apart from the health aspect, there are also financial implications if you don’t have a health plan.
PENALTIES
Under the Affordable Care Art, most people are now required by law to have health insurance either through their employer, Medicare, Medicaid, or by purchasing their own coverage.
Don’t have any of the above? You could be subjecting yourself to an annual penalty that could cost you nearly as much as buying insurance.
Penalties were relatively low in 2014, but are increasing in 2015 and will continue to go up each year, thereafter.
Penalties are assessed in one of two ways and you will pay whichever is greater of the two amounts:
• 2% of your yearly household income. For example, if you make $50,000 and don’t have a health plan, you would be subject to paying a $794 penalty for 2015 according to a calculator from the Tax Policy Center. The maximum penalty is the national average premium for a bronze plan. In addition to the penalty, you will also be responsible for 100% of your medical bills during the year.
• $325 per adult and $162.50 per child under 18 years of age, with a maximum penalty of $975 per family for the year.
Note: In 2016, it will be 2.5% of your household income or $695 per person with a maximum of $2,085 per family.
If you do end up having to pay a penalty for not having health insurance, you will be required to pay it when you file your federal income tax return. If you’re uninsured for just part of the year, 1/12 of the yearly penalty applies to each month you are uninsured. If you’re uninsured for less than three months, however, you won’t have to pay a penalty.