Spoiler Alert: This not-so-friendly reminder just released by state health exchange czar Scott Leitz may be unhealthy for your check book and budget.
In case you had better things to do the last five years and missed it, the individual mandate under the Affordable Care Act requires everyone to obtain specified health coverage or pay the price.
If not, the resulting tax penalty could wipe out your refund, according to the state health care exchange czar.
“A sizeable tax return could easily be erased if a tax penalty is due because you don’t have health insurance,” said Leitz in a news release.
Sure, the penalty “only” amounted to $95 per adult or one percent of taxable income with a cap of $285 per family—last year. Like everything else in 2015, however, the price will be going up.
Non-compliers will pay a much stiffer price, roughly three times more. Minnesotans who run afoul of the mandate will be assessed $325 per adult and $162.50 per dependent under 18 up to a maximum of $975 or two percent of yearly household income, whichever costs you more.
Here’s the kicker. Even those who do pay the feds’ penalty will still be left out in the waiting room without medical coverage despite their payment, truly a lose-lose.
Don’t get Leitz wrong. MNsure issued the alert reluctantly only in order to save Minnesotans even more pain.
“No one likes to talk about taxes or penalties, but the reality is both do exist. MNsure does not set these penalty amounts, nor does the money from these penalties go to MNsure,” said Leitz.
So why would it be “in our best interest to remind Minnesotans about these tax liabilities to make sure they get health insurance coverage before February 15, instead of a surprise at tax time?” as Leitz said.
It’s a not-so-subtle reminder that open enrollment for MNsure ends on February 15. While more Minnesotans than ever have health coverage, the Associated Press reported recently that MNsure may soon need more state subsidies due to “lackluster enrollment in private plans and drying-up federal funds.”
Seems like a mandate for individual Minnesota taxpayers to pay the penalty for MNsure, whether they enroll or not.