How to Avoid the Obamacare Health Insurance Penalty
Money Girl explains what Americans with different types of health plans need to do to avoid the Obamacare penalty.
Laura Adams, MBA
Q. “Since everyone is now required by law to have health insurance, how do we notify the government that we’re already covered and avoid the Obamacare penalty?”
Answer. When your file your tax return for 2014, you will have to enter information about your health coverage. You should get a notice from your health insurance company in January 2015 that describes your coverage status during the previous year.
If you don’t have a qualified health plan for 2014 or qualify for an exemption—such as having low-income, being incarcerated, or being a member of a federally-recognized tribe—you’ll be charged a penalty on your tax return. This means you’ll owe additional tax or get a reduced tax refund.
However, if you have any of the following types of qualified policies, that give you minimum essential health coverage, you won’t face a penalty:
- Individual plans purchased through a state health insurance marketplace or broker
- Grandfathered health plans
- Employer-sponsored group plans
- COBRA coverage
- Union plans
- Student health plans
- TRICARE (military health coverage)
- Veterans’ health care programs
- Medicare
- Medicaid
- The Children’s Health Insurance Program (CHIP)
- Peace Corp Volunteer plans
Other Links You Might Like
What Is Obamacare? 8 Facts You Should Know
Obamacare: News, Rules, and Updates
Who Can Get Health Insurance Through Obamacare?
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Girl under tax image courtesy of Shutterstock.
About the Author
Laura Adams received an MBA from the University of Florida. She’s an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura’s previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.