Don’t have health coverage? It’ll cost you at tax time

Covered California officials are reminding residents that anyone who fails to obtain health insurance coverage will have to pay up when filing their taxes this year.

The Federal Patient Protection and Affordable Care Act requires most Americans to have health insurance or pay a penalty known as the “shared responsibility payment.”

A recent report from the Henry J. Kaiser Family Foundation estimates that the average household penalty in 2016 will be $969 – a 47 percent increase from 2015. According to the report, those subject to the penalty include 75 percent of people who are eligible for subsidies.

When filing this year’s taxes, the uninsured will pay either 2 percent of their household income or $325 per adult, whichever is greater. Consumers have until Jan. 31, the end of the current open enrollment period, to sign up for coverage to avoid even steeper penalties next year. For coverage that starts Feb. 1, consumers must sign up before Jan. 15.

“We want to make sure everyone understands the new connection between health care and taxes,” Covered California Executive Director Peter V. Lee said in a news release. “Consumers still have time to take action now, to avoid a significant penalty when they file their taxes next year and protect themselves if something goes wrong.”

There are several ways to sign up for coverage: Online at www.CoveredCA.com or over the phone by calling 800-300-1506. In-person enrollment assistance can be found by visiting www.CoveredCA.com/get-help/local and searching for enrollment help by ZIP code.

This story was originally published January 13, 2016 at 5:59 PM with the headline "Don’t have health coverage? It’ll cost you at tax time."