BOWLING GREEN, Ky (WBKO) -- The deadline to purchase health insurance, without receiving a penalty, is quickly approaching.
“If you do not sign up by March 31, 2014, then you will receive a penalty when you file your taxes,” said Jill Schardein, Sales Represenative at Houchens Insurance Group.
This penalty will affect your 2014 tax return.
According to www.healthcare.gov, if you choose not to purchase healthcare coverage and your household income is more than $19,650, the fee is 1% of your household income. If you make less than $19,650, the penalty costs $95 per person ($47.50 per child under 18 years old). The maximum penalty per family, using this method, is $285.
"There is a verification code that goes onto a W-2 form for folks that are employed. For folks that are not employed, self employed, or are retired, it will probably just be on the honor system,” said Pete Buser, owner of Professional Tax Service.
This will affect your federal tax return, therefore if you are eligible for a refund, it will be reduced from your refund check. If you make less than $10,150 per year, no penalty is owed.
"The penalty, as we see it, will not be a deterrent for people not to buy health insurance," said Pete Buser, owner of Professional Tax Service.
Professional Tax Service customer, Jesse Brock, is self employed and chooses to keep his options open.
"I've never really liked pressure from anyone, especially the government. So, I want to give myself a little freedom and if that means a penalty, then so be it," said Jesse Brock, Professional Tax Service customer.
It's important to understand full coverage is what keeps you from the penalty.
"If you don't sign up for health insurance and do have to pay the fine, that does not mean that you're covered for major medical health insurance. You will still have to cover your medical expenses at 100%,” said Jill Schardein, Sales Representative at Houchens Insurance Group.
The penalty will increase every year. In 2015, it's 2% of income or $325 per person. In 2016, it's 2.5% of income or $695 per person. After that, it's adjusted for inflation.
If you're uninsured for just part of the year, 1/12 of the yearly penalty applies to each month you're uninsured. If you're uninsured for less than three months, you don't have to make a payment.
To learn more about the penalties and exemptions, click on the link provided.