Obamacare Wishes You a Happy New Year With New Taxes

Source: http://www.flickr.com/photos/68751915@N05/

Source: http://www.flickr.com/photos/68751915@N05/

The individual mandate isn’t the only tax-based provision that rang in the new year along with the Affordable Care Act. In addition to the uninsured having to pay extra starting on January 1, two other programs will be lightening pocketbooks around the country: Joining the individual mandate are the health insurer tax and the reinsurance fee.

Most people are aware of the individual mandate. As a way to guarantee healthy people sign up for health insurance, and in order to offset the higher costs of sicker Americans, a fee was included. Chief Justice John Roberts upheld this provision in the Supreme Court’s 5-4 decision on the health care law’s constitutionality. It was a tax, he wrote, not a penalty, allowing the court majority to reach the decision “that the individual mandate may be upheld as within Congress’s power under the Taxing Clause.”

Individuals must maintain a minimum standard of coverage, or they will be fined. This is calculated one of two ways. The first is that the fee can be 1 percent of a yearly household income. The percentage increases in subsequent years, growing to 2 percent in 2015, 2.5 percent in 2016, and will be adjusted for inflation thereafter. The cost can also be calculated by charging $95 per uninsured adult and $47.50 for each child younger than 18. The payment required is determined by calculating which cost is higher.