There has been some online chatter about the deadline to enroll – why there will have to be a delay, as well as how Jackson Hewitt tax preparation company first pointed out that you’ll actually have to get coverage by Valentine’s Day to avoid paying the penalty (unless there is a delay) because the Affordable Care Act (ACA) mandates coverage by March 31 and health insurance coverage typically starts the first day of a given month with applications required approximately 15 days in advance.
Delay or not, it’s smart to know the penalty for not meeting this mandate so you can make an informed decision.
Year 1: $95 or 1 percent of your taxable income, whichever is greater.
This means anyone with $60,000 in taxable income will be subject to a $600 penalty in year one.
Year 2: $325 or 2 percent of your taxable income.
With $60,000 in taxable income, that’s a possible $1,200 penalty.
Year 3: $695 or 2.5 percent of taxable income.
That’s another $1,500 for anyone with $60,000 in taxable income.
Over the three years, that’s a total of $3,300 in penalties for not having coverage.