Tags: Healthcare Reform | obamacare | fine | enrollment

Tax Preparers: People Picking Fines Over Obamacare

By    |   Saturday, 21 Mar 2015 03:03 PM

Many taxpayers are taking a tax penalty rather than buying health insurance under Obamacare, despite a special enrollment period to allow them to sign up for coverage and avoid further penalties, according to tax preparers.

"Our analysis indicates that a significant percentage of taxpayers whose household members were not covered for at least a portion of 2014 are opting" to pay the penalty, Mark Ciaramitaro, a vice president of health-care enrollment services for H&R Block, told The Wall Street Journal.

According to the healthcare reform law, Americans who don't have healthcare coverage face a fine at tax time. This year's enrollment period ended on Feb. 15, but a special enrollment period launched Sunday. It seems unlikely to boost enrollments significantly.

A survey of 3,000 adults finished in February showed that only about 12 percent of those who are uninsured would buy policies if they learned about the penalty, according to McKinsey & Co.'s Center for U.S. Health System Reform.

About 11.7 million have already signed up for insurance through federal and state exchanges this year, but federal officials believe as many as six million households could still owe a penalty for not obtaining insurance. However, officials have not said how many of those will sign up for coverage in the special enrollment period.

The period is for people who have to pay for going without coverage last year and expect a penalty for this year. But even if they get insurance, they still will owe fines for 2014, but they won't incur any more penalties.

The fines are also growing this year. People who were uninsured last year faced a fine of $95 or one percent of their income, whichever number was higher. But in 2015, the fines grow to two percent, or $325.

There may be another ugly surprise from last year. H&R Block estimates that up to half of the seven million people who got subsidies to pay for their coverage last year could have to refund money.

As the subsidies are based on projections of income, some people estimated wrong and got too much money, and could either take a hit on their tax refunds or have to pay the government back — and tax experts say that issue won't be going away, because the system still depends on consumers' projections.

In addition, because many people were automatically renewed by the government for coverage, their subsidies may come out too high, if their pay went up and they still got the same credits they got in 2014.

“These flawed income projections can just perpetuate because so many people were auto-renewed. That concerns me from a policy standpoint,” Tara Straw, a health-policy analyst at the Center on Budget and Policy Priorities, told The Wall Street Journal. “If it was wrong for 2014, it will be wrong for 2015.”

© 2017 Newsmax. All rights reserved.

 
1Like our page
2Share
US
Many taxpayers are taking a tax penalty rather than buying health insurance under Obamacare, despite a special enrollment period to allow them to sign up for coverage and avoid further penalties, according to tax preparers.
obamacare, fine, enrollment
471
2015-03-21
Saturday, 21 Mar 2015 03:03 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved