Benefits Buzz

2015 Individual Mandate Penalty Averages $200+ More than Previous Year

Posted on April 4th, 2016

H&R Block®, the largest tax services provider in the country, has indicated that so far this year the average penalty paid by those individuals without health insurance in 2015 is $383. The average penalty paid in 2014 was $172, reflecting an increase of $211 from the previous year. The penalties will be steeper in 2016 being the greater of $695 or 2.5% of income.  
They also indicated that roughly 6 out of every 10 people who received subsidized coverage through the Health Insurance Marketplace had to repay a portion of those subsidies. This is due to the fact that subsidies are generally provided in advance based on estimated income for the year, and then those subsidies are reconciled when filing federal income tax returns. Those individuals who underestimated their income have to repay a portion of the subsidy. The average repayment so far this year has been $579 compared to $530 last year. 
In addition, about 1 out of 3 people who received subsidized coverage through the Health Insurance Marketplace received too little of a subsidy because they overestimated their income for 2015. These people are entitled to a subsidy reimbursement by virtue of a tax refund. The average tax refund has increased by $450 to those individuals who fall into this category. 
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The materials contained within this communication are provided for informational purposes only and do not constitute legal or tax advice.  Flex is in no way affiliated with H&R Block.


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