More Expected to Face Tax Penalties in 2016
Oct 4th, 2012
President Obama’s Affordable Care Act (ACA) of 2010 includes tax penalties in 2016 for Americans who refuse to purchase health care insurance. It was estimated that 4 million Americans will be affected by this mandate.
Now, the nonpartisan Congressional Budget Office said the numbers can be 50 percent higher than originally expected. The group said that 6 million Americans will have to pay tax penalties when the mandate is implemented in 2016.
Those who will be affected by the penalty are mostly from the middle class and the average penalty is about $1,200. This is a significant amount for the 80 percent of the affected individuals and families who earn less than five times the federal poverty level.
In 2014, the ACA will require virtually every legal U.S. resident to have health insurance coverage or pay a tax penalty. People with low-income, religious objections, and other reasons may be exempted from the requirement.
With health coverage through employers; individual plans; and government programs, most Americans don’t have to worry about the requirement. According to the Obama Administration, only two percent of the population will be affected by it.
The Department of Health and Human Services (HHS) suggested that the penalty is intended for those who refuse to fulfill their civic duties.
“This doesn’t change the basic fact that the individual responsibility policy will only affect people who can afford health care but choose not to buy it,” said Erin Shields Britt of the HHS. “We’re no longer going to subsidize the care of those who can afford to buy insurance but make a choice not to buy it.”
Republicans and opponents of the ACA see the penalty as a tax increase on the 6 million affected by the requirement; something President Obama vowed not to do.
According to the Congressional Budget Office, the 50 percent increase is due to the economic state, high unemployment, lower wages, and new federal regulations. They estimate that the tax penalties will add about $7 billion to the 2016 federal budget.
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Tags: health news | healthcare | Tax Penalties in 2016
Posted in: Simon Bukai | Comments Off