Taxes for 2014 are due this week, and your tax bill could be affected by your health insurance. If you had insurance during the entire calendar year of 2014 through an employer, a state exchange, or Medicare Part A, you can simply check that box off on your tax form. If you didn’t have coverage last year or for only part of the year, you must complete Form 8965 and calculate your penalty. This penalty is $95 or 1% of the family’s income, whichever is greater. To avoid this penalty for 2015, there is a special open enrollment period through April 30 on the exchange. The penalty increases to $325 or 2% of income for 2015 and rises to $695 or 2.5% of income in 2016.
If you received subsidies to help purchase insurance and underestimated your 2014 income, you may have to pay back the government. Subsidies make coverage more affordable to people with income 100-400 % of the federal poverty level. While 76% of people eligible for subsidies between 100-150% of poverty level enrolled in plans during 2014, only 41% of those with income 150-200% of poverty and 30% of 201-250% of poverty signed up. Those with income 400% of poverty level had only 2% sign up for health insurance on the exchange, having little motivation to do so and most likely bought coverage outside of it.
“KHN Video: Tax Deadline Meets The Health Law.” News. Kaiser Health News, 2 Apr 2015. Web. 14 Apr 2015.
Andrews, Michelle. “Many People Entitled To Hefty Subsidies Still Opt Against Coverage.” News. Kaiser Health news, 27 Mar 2015. Web. 14 Apr 2015.