The Affordable Care Act (ACA) made it mandatory for all Americans to have health insurance. Failure to have health insurance attracted a tax penalty.
While the tax penalty was revoked starting 1st January 2019 at the federal level, some American states passed separate laws to penalize people without health insurance. Currently, five states levy penalties on American citizens for not having health insurance. Let’s explore these five states.
California
In 2020, the California Franchise Tax Board started penalizing individuals without health coverage. California residents without health insurance must pay a penalty while filing their state tax return. Adults with no health insurance coverage for an entire year attract a minimum of $900/person penalty. The penalty is at least $450/dependent children without health coverage for an entire year. So, if a family of four doesn’t get adequate health coverage, they can attract a hefty penalty of nearly $2,700.
New Jersey
New Jersey residents with insufficient or no health insurance attract penalties in the form of Shared Responsibility Payment (SRP). The penalty is paid for the number of months the individual and their family remained uninsured or underinsured. The exact penalty amount is calculated based on the individual’s income and family size. Individual taxpayers may pay a minimum of $695 in penalty and a maximum of $4,284. The penalty amount is capped at the statewide average of Bronze Health Plan’s annual premium amount.
Rhode Island
Residents of Rhode Island with no health coverage or health coverage exemption must pay a penalty while filing their personal Rhode Island income tax return. The penalty is in the form of Shared Responsibility Payment (SRP). The penalty is 2.5% of your modified adjusted gross income above the tax filing threshold or a flat $57.92/month/individual and $28.96/month/dependent children, whichever is higher. The penalty is capped at the average annual premium amount of the Bronze Plan for a flat dollar penalty payment.
Massachusetts
In Massachusetts, individuals deemed to be able to afford health insurance get penalized for not having health insurance. Individuals with income equal to or less than 150% of the Federal Poverty Level (FPL) are exempt from penalty. People whose income is equal to 150.1%-200% of FPL are penalized at $24/month or $288/year. The penalty increases with increasing income. Penalties for married couples will equal the sum of individual penalties for each spouse.
Washington D.C.
Washington D.C. residents pay a penalty if not covered under appropriate health insurance. The state exempts individuals facing financial hardships from paying any penalty for non-compliance. People without health coverage pay a penalty of $695/person ($347.50/children under 18) or 2.5% of household income, whichever is higher.
15 States That Mandate You as an Adult Child to Care For Parents
Taking care of parents is considered a moral responsibility in many cultures and regions, but not all have legal laws to enforce it. However, America is among the few countries with legal laws that ensure children care for their parents under filial responsibility laws. Let’s explore 15 states that mandate adult children to provide for their parents under this law.
Read here.
