flat rate

Maximum Possible Fine

The Affordable Care Act’s Individual Shared Responsibility has a penalty provision that caps the applicable fine in several ways. There is a maximum Obamacare penalty based on a flat rate amount and another maximum based upon a percentage of your tax return’s MAGI.

In addition, those with very high incomes will not pay more than the average national health insurance Bronze premium plan based on what’s available at the Federal Government’s Obamacare online marketplace.

This Bronze maximum is the absolute cap on any Single filer’s Obamacare fine. That said, each year the average premium will likely increase which means the maximum ACA penalty will also become more costly over time.

The following is breakdown of the maximum fines:

Calendar Year 2016

Third year enforcement of the Obamacare fine is the greater of:

$695 per adult + $347.50 per child but not to exceed $2,085

or

2.5% of income (Modified Adjusted Gross Income)

The Absolute Maximums

No single filer could be subject to more than $2,676 or $223 for each full month of being uninsured during 2016. This is based on the Bronze premium standard for very high income earners.

However, the absolute maximum per tax return can be higher due to additional uninsured persons on your return.

So families of 5 or more could be required to pay an Obamacare fine of as much as $13,380 or $1,115 per month in 2016.

Again, these large penalties will apply to very few higher income earners who were without qualifying health insurance.

We encourage you to use our 2016 Obamacare penalty calculator if you can estimate what you will earn this year.

Calendar Year 2015

Second year enforcement of the Obamacare fine was the greater of:

$325 per adult + $162.50 per child but not to exceed $975

or

2% of income (Modified Adjusted Gross Income)

The Absolute Maximums

No single filer could possibly be subject to more than $2,484 or $207 for each full month of being uninsured during 2015. This is based on the Bronze premium standard for very high income earners.

However, the absolute maximum per tax return can be higher due to additional uninsured persons listed on your return.

So families of 5 or more could be required to pay an Obamacare fine of as much as $12,420 or $1,035 per month in 2015.

Again, these large penalties applied to very few higher income earners who were without qualifying health insurance.

We encourage you to use our 2015 Obamacare penalty calculator if you know what you earned that year.

Calendar Year 2014

First year enforcement of the Obamacare fine was the greater of:

$95 per adult + $45 per child but not to exceed $285 (on a single tax return)

or

1% of income (Modified Adjusted Gross Income)

The Absolute Maximums

No single filer could possibly be subject to more than $2,448 or $204 for each full month of being uninsured during 2014. This is based on the Bronze premium standard for very high income earners.

However, the absolute maximum per tax return can be higher due to additional uninsured persons listed on your return.

So families of 5 or more could be required to pay an Obamacare fine of as much as $12,240 or $1,020 per month in 2014.

Again, these large penalties applied to very few higher income earners who were without qualifying health insurance.

We encourage you to use our 2014 Obamacare penalty calculator if you know what you earned that year.

Flat Rates vs. Percentage

Your reported income, or MAGI, is a big factor when calculating the Shared Responsibility Payment’s penalty but only when a flat rate does not apply.

Flat rate maximum Obamacare fines tend to apply to lower income uninsured earners. Taxpayers with higher incomes are more likely to be fined based on a percentage of their income (2.5% for 2016 and beyond).

Our calculators automatically determine whether you are subject to a flat rate or percentage rate based on your income.

How Obamacare Fines Apply

It’s important to understand that any fine, maximum or not, will only apply to months that you are without qualifying health insurance. You are also allowed a short-term coverage gap of just under 3 months.

So, for example, being without coverage for only half of a year will cut your Obamacare penalty in half. Each month is 1/12 of the stated fine.

Examples and Scenarios

You can see calculation examples, which go into more detail, showing how to figure out an accurate Obamacare fine.