Are there penalties for not having health insurance?

“Under the legislation, most Americans will have to have insurance by 2014 or pay a penalty. The penalty would start at $95, or up to 1 percent of income, whichever is greater, and rise to $695, or 2.5 percent of income, by 2016. This is an individual penalty; families have a maximum penalty of $2,085. Some people are exempted from the insurance requirement because of financial hardship or religious beliefs or if they are American Indians.”

“The penalty that you plan to refuse to pay is the one that — with a few exceptions, mostly for financial hardship — will be levied on people who don’t have health insurance starting in 2014.

In 2016, when the penalty is fully phased in, it will be $695 for an individual (up to $2,085 per family) or 2.5 percent of household income, whichever is greater. The penalty will increase annually based on the cost of living.

Ordinarily, the penalty would be treated as a tax, and you could be prosecuted for income tax evasion if you didn’t pay it. But the new health law explicitly says that there will be no criminal sanctions for failing to pay the penalty, and no liens or levies on your property, said Timothy Jost, a law professor at Washington and Lee University. The government could come after your tax refund to pay the penalty, but since you say you don’t get a refund, that won’t be an option.”

“As amended by Section 1002 of the Reconciliation Act, failure to maintain coverage will result in a penalty of the greater of $95 or one percent of income in 2014, $325 or two percent of income in 2015 and $695 or 2.5 percent of income in 2016, up to a cap of the national average bronze plan premium. Families will pay half the amount for children up to a cap of $2,250 for the entire family. After 2016, dollar amounts will increase by the annual cost of living adjustment. Exceptions to the individual responsibility requirement to maintain minimum essential coverage are made for religious objectors, individuals not lawfully present, and incarcerated individuals. Exemptions from the penalty will be made for those who cannot afford coverage, taxpayers with income below the filing threshold, members of Indian tribes, those who have received a hardship waiver and those who were not covered for a period of less than three months during the year.”