For 2014, the annual penalty is either:
• One percent of your household income that is above the tax return filing threshold for your filing status; or
• Your family’s flat dollar amount, which is $95 per adult and $47.50 per child, limited to a family maximum of $285.
Your payment amount is capped at the cost of the national average premium for a bronze level health plan, available through the Marketplace in 2014. For 2014, the annual national average premium for a bronze level health plan available through the Marketplace was $2,448 per individual ($204 per month), but $12,240 for a family with five or more members ($1,020 per month). For 2015, the annual national average premium for a bronze level health plan available through the Marketplace is $2,484 per individual ($207 per month), but $12,420 for a family with five or more members ($1,035 per month).
Calculating your payment requires you to know your household income and your tax return filing threshold.
Household income is the adjusted gross income from your tax return plus any excludible foreign earned income and tax-exempt interest you receive during the taxable year. Household income also includes the adjusted gross incomes of all of your dependents who are required to file tax returns.
Tax return filing threshold is the minimum amount of gross income an individual of your age and filing status (for example, single, married filing jointly, head of household) must make to be required to file a tax return.
The IRS will generally assess and collect individual mandate penalties in the same manner as taxes, with certain limitations. As a result, any penalty under the individual mandate will likely be subtracted from the tax refund that the individual is owed, if any.
Starting in 2015, individuals will have to report on their federal tax return whether they had health insurance coverage for 2014 or were exempt from the individual mandate. Any penalties that an individual owes for not having health insurance coverage will generally be assessed and collected in the same manner as taxes.