Norma Jean Gargasz/Alamy
By Kara Brandeisky
December 9, 2015

To make sure Americans get health insurance, the Affordable Care Act offers both carrots and sticks. Buy a health plan, and you may be rewarded with a subsidy to help cover part of the cost. But skip out on coverage, and you can get hit with a tax.

And that tax keeps going up. According to new estimates from the Kaiser Family Foundation, people who went without insurance in 2015 will owe an average of $661 at tax time this spring, and people who remain uninsured in 2016 will owe an average of $969 in 2017 — a 47% increase.

The tax is called the “individual shared responsibility payment” or the “individual mandate,” and calculating it can be complicated. This tax season, people who were uninsured in 2015 will owe either 2% of their household income, or $325 per adult and $162.50 per child (capped at $975 total) — whichever is higher. The Kaiser Family Foundation estimates that on average, this tax will shake out to $661 per household.

Next year, skipping out on insurance will get even more costly. People who don’t get coverage in 2016 will owe either 2.5% of their household income, or $695 per adult and $347.50 per child (capped at $2,085 total) — whichever is higher. After crunching the numbers, the Kaiser Family Foundation estimates that the average household subject to the 2016 tax will owe $969.

But you may end up paying a lot more than that. The tax is structured so that after a certain threshold, people who earn more owe more. For Americans who don’t qualify for a subsidies — which are only available to households making less than 400% of the poverty line — the estimated average penalty is actually $1,177 this tax season, according to the Kaiser Family Foundation. Less affluent Americans who do qualify for subsidies will only have to pay an estimated $389, on average. Next year, Americans who do not qualify for subsidies will owe an estimated average of $1,450, while Americans who do qualify will owe $738.

These rules can put middle-class Americans in a bind. Individuals making more than $47,080 and families of four earning more than $97,000 are too wealthy to qualify for subsidies. But they may still struggle to afford health insurance. In 2015, the average per-person monthly premium on silver plans, the most popular type of plan, was $364 before subsidies, according to the Department of Health and Human Services. The Kaiser Family Foundation calculates that only 1% of Americans who are not eligible for subsidies could find a silver plan for less than the Obamacare tax in 2016. Only 5% could find a bronze plan — the cheapest kind of plan available to everyone on the marketplace — for less than the tax.

However, the law ensures that you won’t ever pay more for the tax than the average national price of a bronze plan. In 2015, the average bronze plan cost $207 a month for individuals and $1,035 for a family of five or more, according to the IRS. Making a significant outlay now protects you from the potentially catastrophic bills that could result from an emergency.

Plus, Americans who do qualify for subsidies have every reason to get covered: 48% of them could find a bronze plan for less than the tax, the Kaiser Family Foundation says. The average subsidy this year was $263 a month.

Finally, one piece of good news: Some Americans who remain uninsured will qualify for exemptions from the tax. For example, you don’t have to pay the tax if the cheapest plan would cost more than 8.05% of your income, if you don’t meet the filing threshold ($10,150 this year), or you suffered another eligible hardship.

All told, the Kaiser Family Foundation estimates that 78% of Americans who are uninsured and eligible to buy plans on the marketplace will have to pay the tax in 2016.

Want to avoid a near-$1,000 tax in the years to come? Now is the time to get covered. Open enrollment for 2016 plans lasts from Nov. 1, 2015 to Jan. 31, 2016 — and this year, that’s a hard deadline. Enroll by Dec. 15 to get coverage by Jan. 1.


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