Deadline for Health Insurance Penalty Approaching

Posted at: 03/10/2014 10:55 PM
Updated at: 03/10/2014 11:05 PM

(ABC 6 News) -- Three weeks from now, on March 31st, if you do not have health insurance, you will begin getting fined by the federal government.

The penalties break down like this: For this year, an individual will be charged $95 or one percent of their taxable income, whichever is higher.

Most people would end up paying the one percent, but that percent and the flat rate both increase over the next two years, ending up at $695 or 2.5 percent in 2016.

In Olmsted County, with the average household making $66,667 a year, a family of four would pay the 2014 percentage rate. But by 2016 the flat fee is higher, meaning a family making the median income would pay $2,085.

But with many premiums in our area far exceeding what you would pay in fees, experts said many are opting to stay uninsured.

"I get the feeling that we have a lot of young people who are thinking, 'I'd rather pay the penalty, it's not that much money,’” said William Feldmann, a certified public accountant with Refunds U.S.A. in Albert Lea. “Well, it can add up."

And for those who may qualify for premium assistance, it can be even more difficult to figure out the best option.

Because most people applied to MnSure using their 2012 tax return, those who saw a change in employment may see their assistance change, or end up owing money this time next year.

"If you're going to a higher paying job, keep in mind, your premium assistance is probably a wrong number,” Feldmann said. “Same thing if you go to a much lower paying job. And both of those situations are going to be recalculated when we do the 2014 tax return next Spring.”

All fees and premium costs will vary on a case-by-case basis, so if you have any questions, experts encourage you to consult a tax professional.