What About the ACA Penalty?

hhs-healthcare.govWhat is the Penalty?

People are very concerned about the Affordable Care Act penalty if they do not have what is called “Minimum Essential Coverage.”

First, what exactly does “Minimum Essential Coverage” mean? Minimum Essential Coverage (MEC) is any plan that falls into several categories. Below are a few types of plans, a full list can be found at www.healthcare.gov

  • Any job-based plan including retiree plans
  • Medicare Part A or Part C (does not include Part B)
  • Most Medicaid Plans
  • Most Student Plans
  • Some VA Plans

If you are not enrolled in one of the MEC plans you are potentially subject to a penalty that must be paid with your taxes. So how much is the penalty?

There are two possible totals that you can pay, but you only pay whichever is greater:

Percentage of income

  • 2.5% of household income
  • Maximum:?Total yearly premium for the national average price of a Bronze plan sold through the Marketplace

Per person

  • $695 per adult
  • $347.50 per child under 18
  • Maximum:?$2,085

That is the penalty maximums and it can only be collected if you voluntarily pay it or if it is witheld from your tax refund. There is no liens, judgements, etc. that can be applied to you for not paying the penalty.

Why does this matter?

Some people do not find that the ACA MEC plans are affordable to them. In fact, this is the rule not the exception. So what options do you have?

There are plans out there that do not meet ACA requirements but have much lower premiums, and, for healthy people, often have better coverage. What you need to look at is how much you will save in premiums vs how much the penalty will cost. That determines which is the better option for you.

There are other factors to look at that a licensed agent will help you navigate. Request a quote today to get a call from an agent who can walk you through all of the plan options.