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IRS: Cheapest Obamacare Plan Will Be $20,000 Per Family

Posted by on Jan. 31, 2013 at 10:20 PM
  • 75 Replies

(CNSNews.com) – In a final regulation issued Wednesday, the Internal Revenue Service (IRS) assumed that under Obamacare the cheapest health insurance plan available in 2016 for a family will cost $20,000 for the year.

Under Obamacare, Americans will be required to buy health insurance or pay a penalty to the IRS.

The IRS's assumption that the cheapest plan for family will cost $20,000 per year is found in examples the IRS gives to help people understand how to calculate the penalty they will need to pay the government if they do not buy a mandated health plan.

The examples point to families of four and families of five, both of which the IRS expects in its assumptions to pay a minimum of $20,000 per year for a bronze plan.

“The annual national average bronze plan premium for a family of 5 (2 adults, 3 children) is $20,000,” the regulation says.

Bronze will be the lowest tier health-insurance plan available under Obamacare--after Silver, Gold, and Platinum. Under the law, the penalty for not buying health insurance is supposed to be capped at either the annual average Bronze premium, 2.5 percent of taxable income, or $2,085.00 per family in 2016.

In the new final rules published Wednesday, IRS set in law the rules for implementing the penalty Americans must pay if they fail to obey Obamacare's mandate to buy insurance.

To help illustrate these rules, the IRS presented examples of different situations families might find themselves in.

In the examples, the IRS assumes that families of five who are uninsured would need to pay an average of $20,000 per year to purchase a Bronze plan in 2016.

Using the conditions laid out in the regulations, the IRS calculates that a family earning $120,000 per year that did not buy insurance would need to pay a "penalty" (a word the IRS still uses despite the Supreme Court ruling that it is in fact a "tax") of $2,400 in 2016.

For those wondering how clear the IRS's clarifications of this new "penalty" rule are, here is one of the actual examples the IRS gives:

“Example 3. Family without minimum essential coverage.

"(i) In 2016, Taxpayers H and J are married and file a joint return. H and J have three children: K, age 21, L, age 15, and M, age 10. No member of the family has minimum essential coverage for any month in 2016. H and J’s household income is $120,000. H and J’s applicable filing threshold is $24,000. The annual national average bronze plan premium for a family of 5 (2 adults, 3 children) is $20,000.

"(ii) For each month in 2016, under paragraphs (b)(2)(ii) and (b)(2)(iii) of this section, the applicable dollar amount is $2,780 (($695 x 3 adults) + (($695/2) x 2 children)). Under paragraph (b)(2)(i) of this section, the flat dollar amount is $2,085 (the lesser of $2,780 and $2,085 ($695 x 3)). Under paragraph (b)(3) of this section, the excess income amount is $2,400 (($120,000 - $24,000) x 0.025). Therefore, under paragraph (b)(1) of this section, the monthly penalty amount is $200 (the greater of $173.75 ($2,085/12) or $200 ($2,400/12)).

"(iii) The sum of the monthly penalty amounts is $2,400 ($200 x 12). The sum of the monthly national average bronze plan premiums is $20,000 ($20,000/12 x 12). Therefore, under paragraph (a) of this section, the shared responsibility payment imposed on H and J for 2016 is $2,400 (the lesser of $2,400 or $20,000).”


by on Jan. 31, 2013 at 10:20 PM
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Replies (1-10):
gsprofval
by Gold Member on Jan. 31, 2013 at 10:23 PM
1 mom liked this

No one can afford this stupid healthcare. I know of one person who already got his taxes done and had to pay a fine of $215 per person for not having health insurance.

Heck, it's not even implemented yet and we are being fined? How's that work?

lylalane7275
by Silver Member on Jan. 31, 2013 at 10:30 PM
1 mom liked this

Please, someone tell me how this is going to help us.

SallyMJ
by Ruby Member on Jan. 31, 2013 at 10:44 PM
2 moms liked this

The first year anyway. And then it will go up from there.

I thought Obama said he was going to make healthcare affordable.

It's not as if we all have $6M lying around, Mr. President!

Have some compassion on the middle class and the children.

tnmomofive
by Silver Member on Jan. 31, 2013 at 11:00 PM
2 moms liked this

elll ELLL I cannot believe we are stuck with this shit.

Imacakebaker
by on Jan. 31, 2013 at 11:07 PM
1 mom liked this

Holy Crap.. That's like $1600 a month right?

My mortgage isn't even that much.

Whoot Whoot Obamacare, not.

Lyzmom
by New Member on Jan. 31, 2013 at 11:09 PM
1 mom liked this
$20,000...that's half our yearly income. wtf?
I wonder how this all will affect state health programs. We pay based on income right now.
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mustbeGRACE
by Silver Member on Jan. 31, 2013 at 11:09 PM
2 moms liked this

Households with no net tax paid    ( EIC and less)  will face  

 NO   PENALTY.

toomanypoodles
by Poodles on Jan. 31, 2013 at 11:10 PM
4 moms liked this

 Hey, the majority of folks wanted this. 

mustbeGRACE
by Silver Member on Jan. 31, 2013 at 11:14 PM



Quoting toomanypoodles:

 Hey, the majority of folks wanted this. 

I know.

Obama's just pushing us to a single payer system.




JakeandEmmasMom
by Gold Member on Jan. 31, 2013 at 11:14 PM
2 moms liked this
It hate to tell y'all this, but it is close to that NOW if you don't have insurance through your employer. Has been for years.
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