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The Mythical $95 Obamacare Penalty

I hear this quite a bit from the public but find it a bit disconcerting when I hear it from agents and brokers who are supposed to be better versed in these thing.

The myth is that the penalty for not complying with the Obamacare rule of having creditable qualified health coverage will be $95 in 2014.  Well, if  a person has an adjusted income of $9500 annually then yes, the penalty is $95 in 2014.  Of course, that person would qualify for no-cost Medi-Cal (CA Medicaid) and would be able to obtain qualified health coverage and avoid the penalty.

The actual penalty for 2014 is $95 OR 1% of income, whichever is greater.  By 2016 this goes up to 2.5% of income.  Below I have broken out the actual numbers for the penalty for California residents should they choose to avoid buying a qualified health plan under Obamacare.

Income               2014               2015               2016
                           1%                   2%                 2.5%

$20,000             $200                $400                 $500
$30,000             $300                $600                 $750
$40,000             $400                $800                 $1,000
$50,000             $500                $1,000              $1,250
$75,000             $750                $1,500              $1,875
$100,000           $1,000              $2,000              $2,500


As you can see, depending on income level, not having qualified health coverage under Obamacare can be a bit costly in terms of penalty.  When you hear someone say "it's just $95", you can smile because you know the truth.

Dave
www.davefluker.com
www.gilroyhealthinsurance.com

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