Why Do Obamacare “Glitches” Matter? Timetables & Penalties for the Uninsured
By now everyone has surely heard about the debacle regarding the federal government’s website www.healthcare.gov to enroll uninsured Americans in Obamacare. Many people are wondering why it matters so much. The reason that it is so important is because of the timetable associated with penalties for those who remain uninsured beyond 2013. The uninsured need a way to obtain health coverage and understand their options. This website is supposed to be there for that reason, and it has cost tax payers handsomely to put it in place. So far, the government has spent $635 million and the figures are climbing. The bottom line is, for all of these reasons and more, the website should be functional and it isn’t.
If you are one of the millions of Americans without health insurance, you need to understand what responsibilities you have and the fines you will face if you do not get coverage in place by 2014.
Unless you are exempt from paying fines (if you are a Native American, not a US citizen, or in prison, for example), then you need to pay close attention, as the time is drawing near for you to make changes.
The federal government’s website to enroll Americans in Obamacare and comparison shop for coverage has been fraught with problems from day one. According to Kantar US Insights, 9.47 million visitors came to the site the first week, but only 36,000 completed enrollment, which amounts to less than 1%.
The White House’s goal is to enroll 7 million people in the first year. Obama has told officials to work around the clock to address problems with the website. Several weeks into it, however, only a few people who go to the site are successful at signing up for health coverage due to voluminous technical glitches.
Enrollment for the website launched on October 1, 2013. The administration has declared it will get to the bottom of the problems, but IT experts have said the entire system was built on a “sloppy software foundation.”
December 15th is the deadline to enroll if you want insurance to kick in by January 1st. Open enrollment runs through March 31, 2014 if you want to avoid paying penalties.
In 2014, the minimum penalty will be $95 per uninsured adult and $47.50 per child, up to $285 a family. There is a calculation based on 1% of your income to figure out the penalty you will face if you do not get a plan in place. There is a cap on this figure, which amounts to the cost of the annual premium for an Obamacare “bronze plan.”
Penalties will continue to increase until 2016 to $695 per adult or 2.5% of income or whichever is greater, with the cap remaining in place.
How will the government keep up with who has insurance and who doesn’t? You will file it on your income tax return (this is the reason that non-US citizens are exempt- because they pay no taxes, so there is no way to keep up with them…so they will still receive all of the healthcare entitlements they do today without ever paying into the system).
The good news is that the IRS cannot enforce collection of penalties like they do for people who do not pay taxes. They will subtract the penalties from any refund owed, but if they cannot collect that way, there isn’t much recourse other than taking the money out of future refunds. The IRS could go after money held through a person’s employer for taxes, but it won’t be allowed to press criminal chargers or assess other penalties for not paying. The IRS cannot place a lien on property, or do anything else it can do to enforce payment of taxes.
If you are currently insured, you may feel these things do not apply to you; however, it is important to keep abreast of the laws and changes because if your employer drops your coverage as many are doing, or if you lose your job, you will need to know how to proceed.