Analysis: Individual mandate penalty will usually exceed $95 minimum

The penalty associated with the individual mandate will almost always exceed the $95 minimum that is frequently cited as the cost of failing to purchase insurance under the Affordable Care Act (ACA), according to a new analysis.

ADVERTISEMENT

Under current law, people who are able to buy a plan but don't will be fined up to 1 percent of their income, or a minimum of $95. From there, the penalty grows to $325 or 2 percent in 2015, and $695 or 2.5 percent in 2016.

But according to an ACA Tax Penalty Calculator developed by The Tax Policy Center and The Urban Institute, the penalty for most people who decide against purchasing insurance will be more than $95.

For instance, a single person with no dependents will only pay $95 if they make $19,000 a year or less. That fee jumps to $200 if they make $30,000, and $300 if they make $40,000.

For families, the penalty is considerably larger.

A married couple with three children and earning between $50,000 and $100,000 a year will pay between $300 and $800, according to the calculator. The minimum for a married couple with three children is $285 because the penalties extend to the children.

There are income thresholds for those living in poverty, exempting them from the mandate penalty entirely.

This week, 27 Democrats joined House Republicans in voting on a bill to delay tax penalties for failing to buy health insurance this year under ObamaCare.

Republicans say delaying the individual mandate to buy insurance is only fair because of the repeated delays on implementing the employer mandates.

Most Democrats blasted the bill as the GOP’s 50th attempt to repeal or undermine the law, and argue that delaying the penalty would reduce funding for the bill, resulting in less access to healthcare for consumers.