insurance

How does the Obamacare penalty work?

 

It's now the law: If you don't have health insurance, you may have to pay the government a penalty. But how does that work exactly?

The Affordable Care Act requires most Americans to have health insurance for at least nine months out of the year. That effectively makes March 31st the deadline to sign up for insurance or face the penalty. In this first year, the penalty for an individual is either of two things, whichever is greater. It can be a flat $95 or 1 percent of your income that's above the minimum income that requires a person to file a tax return. The current minimum is $10,000, so if you make $50,000 a year, your penalty would be 1 percent of $40,000, or $400. Several groups are exempt from paying the no-insurance penalty, including those who earn less than that $10,000 tax-filing threshold.

For more answers to questions about the Obamacare penalty, visit Bankrate.com. I'm Doug Whiteman.

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