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  • February_Risk Insurance_150.jpg

    Pay Premiums or Pay Penalties

    By Richard Carter, DBA, Full-Time Faculty  
    Published February 2014

    December 23, 2013, was the deadline for many Americans to enroll in an Affordable Care Act (ACA) plan. The media continues to provide many facts and opinions related to the practicality of the ACA premiums and penalties. The information presented here may allow you to form opinions on what has become commonly called the Pay Premiums or Pay Penalties aspects of the ACA.

    Pay Premiums for What?  

    About 16 percent of all Americans, or 50 million people, did not have any sort of health insurance as of 2010. The ACA aims to increase the access and affordability of health insurance coverage for these 50 million uninsured Americans.

    The most heralded aspects of the ACA is the intent to make insurance affordable and available if you:

    a) Have no employer based insurance;

    b) Lost your job or are not working;

    c) Have a pre-existing condition; or,

    d) Could not get insurance based on your age, gender, or health.

    Pay Penalties for What? 

    As a citizen of the United States you will need to show that you have health insurance by January 1, 2014. There is a wide range of average monthly premiums per plan per state. The initial premium average is $220 for an individual over 27 years of age and $800 for a family of four.

    The Internal Revenue Service has established a penalty if you are required to but do not purchase ACA health insurance. The initial penalties are not very high. If you are uninsured in 2014 the fine is $95 per person. The family maximum penalty is the greater of $285 or 1percent of family income. The penalty will increase more than sevenfold in the next 2 years. Fines escalate to as much as $695 per person by 2016. The family maximum premium would be the higher of $2,085 or 2.5percent of family income.

    Where do you stand?

    Small businesses with fewer than 50 employees, which represent approximately 96 percent of all businesses, are not required to secure insurance for their employees. Unless you work for a “large” business you will need to secure health insurance. Your employer may have already notified you about the ACA impacts on the employer based insurance coverage and costs.

    The information provided by the Affordable Care Act website below will answer most questions about deadlines and coverage variations.

    You Will Find More Details at this Site:

    Affordable Care Act

     

    Richard Carter is a full-time faculty member at Kaplan University. The views expressed in this article are solely those of the author and do not represent the view of Kaplan University.

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