What are the Penalties of Being Uninsured?

As you might already know, under the Affordable Care Act, all Americans are required to have health insurance in today's day and age. However, this does not mean that everyone is insured. If you do not have health insurance, you might be wondering what types of penalties you might face because of it.

As of right now, the penalty for not being properly insured is tax-related. This means that you will be asked on your federal income tax form at the end of the year whether or not you are insured. You will also have to answer whether or not anyone else who is covered on your tax forms, such as your spouse or dependents, have coverage.

If you have had to pay tax penalties because of this in the past, you should know that the penalty has increased every year. Whereas it was $325 per adult and $162.50 per child under the age of 18 in 2015, with a maximum family tax penalty of $975 or a percentage of the family's income, this is not the case any longer. Now, for 2016, the penalty will be either 2.5 percent of the family's income for the year or $695 per person, whichever is higher. As you can see, this can add up to a rather substantial fine.

If you owe taxes for the year, this amount will be added to the amount that you have to pay. If you are due a refund, this amount will be subtracted from the amount that you would otherwise receive. Either way, this amount can really hurt, especially if you are not the only one in your household who is not insured.

Plus, failing to have health insurance can carry other penalties, too. Even though you might currently feel that you are better off not paying for health insurance San Diego and instead of paying for your doctor's bills and other healthcare expenses out of pocket, this might not be the case if you or someone in your family falls seriously ill or ends up dealing with a serious health issue. Therefore, if you are currently not covered by health insurance and are thinking about continuing to remain uninsured, or if you are not happy with your current health insurance plan and are thinking about ditching it and paying the tax penalty instead, it is important to think about the penalties of not having health insurance in today's world.