Health Care Law Mandate 'Tax': How Much Is It?

Beginning in 2014, if you are uninsured, not exempt from the new mandate, and refuse to sign up for health care coverage, how much will you owe Uncle Sam?

The health care law sets out a formula to determine your penalty , which will be assessed and collected by the IRS as part of your federal income taxes.

The penalty will be the greater of a flat dollar amount per person, OR a percentage of your taxable income. For dependents under 18, the penalty is half the individual amount.

The annual penalty is capped at an amount roughly equal to the cost of the national average premium for a qualified health plan - in other words you cannot be forced to pay more than it would have cost to buy a plan in the first place.

Flat dollar amount for individuals: $95 in 2014; $325 in 2015; and $695 in 2016; increases indexed to inflation after that, subject to a cap.

For example, courtesy Blue Cross Blue Shield: An uninsured family of three (two parents and one child under 18), not exempt from the mandate, would have a flat dollar penalty of $1,737 in 2016.

Percentage of individual taxable income: fixed percentage of household income in excess of tax filing threshold - 1% in 2014; 2% in 2015; 2.5% in 2016.

For example (again c ourtesy Blue Cross Blue Shield): An uninsured, non-exempt individual with household income of $50,000 would be forced to pay 1 percent of the difference between $50,000 and the tax threshold (let's say $10,00 for an individual in 2014), or roughly $400. Since $400 is greater than $95, this individual would have to pay $400.

There are plenty of exemptions from the penalty. You do not face it if your insurance premiums would be more than 8 percent of your gross income, if you're a member of an American Indian tribe, or if you lacked insurance for less than three months during a year.

The non-partisan Congressional Budget Office projects that 4 million uninsured, non-exempt Americans will refuse to get medical coverage and face the penalty in 2016.

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