Mark your calendars: you have until March 31, 2014 to sign up for health insurance. That’s the deadline imposed under the Affordable Care Act as the last day of open enrollment to sign up for coverage under Obamacare. It’s also the last day to get coverage to avoid paying a penalty in 2014 for being uninsured. Under the Affordable Care Act mandate, most people who choose not to purchase insurance will have to pay a tax penalty (with some exemptions).
Even if you’re actively aware of this deadline and the potential penalty imposed, you may choose not to get health insurance. Whether you think it’s just not worth the cost, you would be able to pay for health care on your own, or you want to defy the federal mandate on principal alone, you may be opting out of purchasing health insurance.
So what exactly happens if you miss the March 31 deadline or if you decide not to buy health insurance at all? Your penalty (due at tax time the following year) is based on a few factors and will steadily increase every year that you don’t have health insurance:
The number of people in your household and your income: In 2014, you will be expected to pay a penalty of $95 per adult and $47.50 per child. There’s a cap though of $285 per family or 1 percent of your family's household adjusted gross income - whichever is greater. The math starts to get complicated as your family earns more money, and while the penalty fees may not seem like a lot this year, they will more than double in 2015.
Qualifying for an exemption: If you qualify for an exemption, you can avoid paying a penalty. Some exemptions include: American Indians, incarcerated individuals, religious objections, those who are not living in the U.S, and those who could not afford to pay for insurance due to economic hardship (defined by the federal government as costing more than 8 percent of your income).
Missing the deadline: If you miss the March 31 deadline for whatever reason and still want to enroll in health insurance, the open enrollment window re-opens in November this year. In the mean time, you’ll have to figure out how to cover your health care needs and pay a penalty for 2014.