From the Wall Street Journal :
For many individuals and families, the penalty for not having health-insurance coverage will run a lot higher than the $95 figure often cited — and it could run into the five figures in some cases.
That’s according to the Tax Policy Center, which has just rolled out a tax penalty calculator — the ACA Tax Penalty Calculator. The calculator helps people figure out how large their tax penalty will be if they fail to obtain required health-insurance coverage.
The deadline for obtaining health insurance to avoid the penalty is March 31. According to the Tax Policy Center, the penalty is “almost always more than the $95 that news stories frequently cite.”
The Tax Policy Center – a joint venture of the left-leaning Brookings Institution and the Urban Institute – created the calculator to help people figure out their actual penalty. For a single person, the penalty could be as much as $3,600, if they had adjusted gross income, subject to certain tweaks, of $370,000 or more. For a family with income over $1 million, the penalty could top $10,000 in the first year.
In a more common case — a married couple with two kids making $50,000 a year on the adjusted basis — the penalty for not having insurance could run about $300 a year. The same couple making $100,000 a year on this basis could be subject to a fine of about $800.
Roberton Williams, a TPC fellow, explained that the fixed dollar penalty of $95 applies only for relatively low-income households. For higher-income families, the penalty is 1% of their income, minus certain adjustments, up to the average national cost for getting basic insurance coverage, known as “bronze” coverage. That will cost about $3,600 per adult plus $1,900 per child in 2014, Mr. Williams said. The penalty will be still higher in subsequent years—2% of taxable income with a minimum of $325 in 2015, and 2.5% of income but at least $695 in 2016 (again capped at the average annual premium for bronze plans).
