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).”
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7 Responses
so much for affordable Barry Hussein promised.
1. how do we see from here that a family of 4 has the same minimum?
2. does that mean that if your agi is less than 20,000 then you go on medicaid?
Well, you got what you voted for!
This proves, once more, that in politics there is no substitute for good character.
The rosy promises of a habitual liar mean nothing!
I now see why the IRS has purchased over many millions of bullets/ammunition…..dark days are coming….one small step at a time….
We who have so called top plans are already seeing that it is worth nothing. Good doctors will be a thing of the past unless one can afford and pay privately. Paying a penalty will be far less than a plan which may give you next to nothing.
The YWN editor who wrote the headline for this article, and some of the commenters, do not know their assumptions from their elbows. The $20,000 figure comes from an example in a regulation. It is not necessarily a prediction or a determination that health care for a family will cost $20,000 per year.
Will everyone please calm down and wait for the facts to emerge.
And by the way, health insurance in my part of New York on the private market for small employers costs about $18,000 per year (after paying deductibles), so a rise to $20,000, while not welcome, is … well, bad, but it could be worse.