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Facing Tax Penalties? What You Need to Know Now

By Lisa ZamoskyApril 20, 2015
From the WebMD Archives

Last week millions of Americans rushed to file their taxes to meet the April 15th deadline. The 2015 tax season is the first time we all have to report whether or not we had health insurance last year. And, under the health reform law, going without health insurance now comes with a price. The deal is that you either have health insurance or pay a fee for going without.

Millions of people were taken by surprise at tax time this year to learn that they owed a penalty for not having coverage in 2014.

Were you one of them? If so, you’re not the only one.

A report just released by the Urban Institute found that more than 4 in 10 uninsured adults had heard little or nothing about the tax penalty they could face for not having health insurance coverage.

The price for going uninsured rises each year. In 2015, you’ll pay either $ 325 per adult or 2% of your household’s taxable income – whichever is higher. That means if you’re single and earn $ 42,000 per year, you’ll be on the hook for a fine of $ 637 for 2015 if you don’t have a health plan in place this year.

Because the government is concerned that that as many as 6 million people will be locked into two years of tax penalties – one for going uninsured during 2014 and a second for this year – it has opened a special enrollment period that lasts until April 30th.

The opportunity to sign up for a health plan outside of the regular open enrollment season, which closed on February 15th, isn’t available to everyone. Here are the three criteria you have to meet to qualify. You must meet all three.

Criteria #1: You were caught off guard by the tax penalty. Did you only learn of the requirement that you and your family have health insurance when you filed your 2014 tax return? If so, you may still be able to buy insurance for 2015 and avoid another penalty.

Criteria #2: You must owe a tax penalty. To qualify for this special enrollment period, you also must owe the tax fee for not having health insurance in 2014.

Criteria #3: You can’t already have insurance for 2015. Unlike the regular open enrollment period, this isn’t a time to shop for a better health plan than the one you currently have. This period is only for people who still don’t have a health plan in place for this year.

If you do qualify, you have just a couple of weeks left to find a health plan for 2015. You can shop your options at Healthcare.gov.

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