Join the Meeting Place for Moms!
Talk to other moms, share advice, and have fun!

(minimum 6 characters)

Current Events & Hot Topics Current Events & Hot Topics

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

Posted by on Feb. 1, 2013 at 1:44 PM
  • 208 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 a 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).”

source

by on Feb. 1, 2013 at 1:44 PM
Add your quick reply below:
You must be a member to reply to this post.
Replies (1-10):
katy_kay08
by on Feb. 1, 2013 at 1:55 PM
10 moms liked this

Holy twisting of the information batman.  

Those examples are used to show how and when an individual would be exempt from the mandate.  They are just examples and do not suggest that is the amount an individual would actually pay towards an employer provided health care plan.  

The link to the document is right there in your original article.  You should actually read it.  

TruthSeeker.
by Milami on Feb. 1, 2013 at 1:58 PM
1 mom liked this

 They have to pay $2400 a month?!! I thought it was a one time deduction taken out of taxes once a year?

Naturewoman4
by Platinum Member on Feb. 1, 2013 at 2:02 PM

Thank-You for posting this Candle.  I just read it quickly & will come back & re-read it.  First, I don't understand why it takes till 2016 for Americans to get Ins.  That's 3 yrs. from now & in the meantime people are going to continue go to the ER for treatment.  Therefore, other people' premiums keep going up to cover for this. 

I just don't see a lot of people getting their Healthcare Ins.  still.  But, having to just pay alittle over $2K a yr., is not very much for a family.  Ours keep going up every yr.  What we pay is for 2 people.  It has gone up so much, that I will be having to take a p/t job, just to afford it.  At this time of my life I wasn't planning on doing so.  Especially, having to go back & do daycare. 

I wonder if my husband & I just dropped our Ins. & take the penalty what would happen?  Could we even to that?  $20K a yr. for Health Ins. through Obamacare is a lot of money!  I don't know how anyone that makes an average salary, can afford that. 

katy_kay08
by on Feb. 1, 2013 at 2:03 PM
1 mom liked this

I suggest you read the actual memo linked in the post.  The $20K number comes from an example used to show when an individual would be exempt from the mandate as well as when one will be eligible for a government sponsored plan.   It does not suggest what the article is saying it does.  

Quoting TruthSeeker.:

 They have to pay $2400 a month?!! I thought it was a one time deduction taken out of taxes once a year?


candlegal
by Judy on Feb. 1, 2013 at 2:06 PM
1 mom liked this

So much for the Affordable care act.  I think I will stick with the name obamacare.

Quoting TruthSeeker.:

 They have to pay $2400 a month?!! I thought it was a one time deduction taken out of taxes once a year?


katy_kay08
by on Feb. 1, 2013 at 2:13 PM
4 moms liked this

from the memo

§1.5000A-3  Exempt individuals.   

...

(e) Individuals with no affordable coverage--(1) In general.  An individual is an exempt individual for a month in which the individual lacks affordable coverage.  For purposes of this paragraph (e), an individual lacks affordable coverage in a month if the individual’s required contribution (determined on an annual basis) for minimum essential 

coverage for the month exceeds the required contribution percentage (as defined in paragraph (e)(2) of this section) of the individual’s household income.  For purposes of this paragraph (e), an individual's household income is increased by any amount of the required contribution made through a salary reduction arrangement that is excluded from gross income.   


(D) Examples.  The following examples illustrate the application of this paragraph 

(e)(3).  Unless stated otherwise, in each example, each individual’s taxable year is a calendar year, the individual is ineligible for any other exemptions described in this section for a month, the rate of premium growth has not exceeded the rate of income growth since 2013, and the individual’s employer offers a single plan that uses a calendar plan year and is an eligible employer-sponsored plan as described in §1.5000A-2(c).   

Example 1.  Unmarried employee with no dependents.  Taxpayer A is an unmarried individual with no dependents.  In November 2015, A is eligible to enroll in self-only coverage under a plan offered by A’s employer for calendar year 2016.  If A enrolls in the coverage, A is required to pay $5,000 of the total annual premium.  In 2016, A’s household income is $60,000.  Under paragraph (e)(3)(ii)(A) of this section, A's required contribution is $5,000, the portion of the annual premium A pays for selfonly coverage.  Under paragraph (e)(1) of this section, A lacks affordable coverage for 2016 because A’s required contribution ($5,000) is greater than 8 percent of A’s household income ($4,800).  

Example 2.  Married employee with dependents.  Taxpayers B and C are married and file a joint return for 2016.  B and C have two children, D and E.  In November 2015, B is eligible to enroll in self-only coverage under a plan offered by B’s employer for calendar year 2016 at a cost of $5,000 to B.  C, D, and E are eligible to enroll in family coverage under the same plan for 2016 at a cost of $20,000 to B.  B, C, D, and E’s household income is $90,000.  Under paragraph (e)(3)(ii)(A) of this section, B's required contribution is B's share of the cost for self-only coverage, $5,000.  Under paragraph (e)(1) of this section, B has affordable coverage for 2016 because B’s required contribution ($5,000) does not exceed 8 percent of B’s household income ($7,200).  Under paragraph (e)(3)(ii)(B) of this section, the required contribution for C, D, and E is B's share of the cost for family coverage, $20,000.  Under paragraph (e)(1) of this section, C, D, and E lack affordable coverage for 2016 because their required contribution ($20,000) exceeds 8 percent of their household income ($7,200). Example 3.  Plan year is a fiscal year.  (i)

Taxpayer F is an unmarried individual with no dependents.  In June 2015, F is eligible to enroll in self-only coverage under a plan offered by F’s employer for the period July 2015 through June 2016 at a cost to F of $4,750.  In June 2016, F is eligible to enroll in self-only coverage under a plan offered by F’s employer for the period July 2016 through June 2017 at a cost to F of $5,000.  In 2016, F’s household income is $60,000.   

Under paragraph (e)(3)(ii)(C) of this section, F’s annualized required contribution for the period January 2016 through June 2016 is $4,750 ($2,375 paid for premiums in 2016 x 12/6).  Under paragraph (e)(1) of this section, F has affordable coverage for January 2016 through June 2016 because F’s annualized required contribution ($4,750) does not exceed 8 percent of F’s household income ($4,800).   (iii) Under paragraph (e)(3)(ii)(C) of this section, F’s annualized required contribution for the period July 2016 to December 2016 is $5,000 ($2,500 paid for premiums in 2016 x 12/6).  Under paragraph (e)(1) of this section, F lacks affordable coverage for July 2016 through December 2016 because F’s annualized required contribution ($5,000) exceeds 8 percent of F’s household income ($4,800).



BaronSamedi
by Bronze Member on Feb. 1, 2013 at 2:15 PM

  Someone forgot their calculator!

mikiemom
by Ruby Member on Feb. 1, 2013 at 2:15 PM

 Sigh, your insurance isn't going to be 20K per year.


Quoting Naturewoman4:

Thank-You for posting this Candle.  I just read it quickly & will come back & re-read it.  First, I don't understand why it takes till 2016 for Americans to get Ins.  That's 3 yrs. from now & in the meantime people are going to continue go to the ER for treatment.  Therefore, other people' premiums keep going up to cover for this. 

I just don't see a lot of people getting their Healthcare Ins.  still.  But, having to just pay alittle over $2K a yr., is not very much for a family.  Ours keep going up every yr.  What we pay is for 2 people.  It has gone up so much, that I will be having to take a p/t job, just to afford it.  At this time of my life I wasn't planning on doing so.  Especially, having to go back & do daycare. 

I wonder if my husband & I just dropped our Ins. & take the penalty what would happen?  Could we even to that?  $20K a yr. for Health Ins. through Obamacare is a lot of money!  I don't know how anyone that makes an average salary, can afford that. 


 

candlegal
by Judy on Feb. 1, 2013 at 2:24 PM
1 mom liked this

Don't worry, it will be cheaper for everyone to pay the fine and not worry about having insurance.

Naturewoman4
by Platinum Member on Feb. 1, 2013 at 2:29 PM
1 mom liked this

That's why Obamacare never made sense.  First of all, it doesn't take in affect till 2016.  Why?  I also, believe that a lot of people will just take the penalty.  So, what then does Obamacare accomplish?  When Obama first took office, he pledged to Americans that he will see to it that ALL OUR Healthcare will go down.  Yeah, sure.  He is just making sure that those that don't want to buy Ins. be responsible, don't have to.  That all us other 'responsible' taxpayers will cover theirs.   


Quoting candlegal:

Don't worry, it will be cheaper for everyone to pay the fine and not worry about having insurance.


 

Add your quick reply below:
You must be a member to reply to this post.
Join the Meeting Place for Moms!
Talk to other moms, share advice, and have fun!

(minimum 6 characters)

close Join now to connect to
other members!
Connect with Facebook or Sign Up Using Email

Already Joined? LOG IN