Money Girl explains what Americans with different types of health plans need to do to avoid the Obamacare penalty.
Q. "Since everyone is now required by law to have health insurance, how do we notify the government that we’re already covered and avoid the Obamacare penalty?"
A. When your file your tax return for 2014, you will have to enter information about your health coverage. You should get a notice from your health insurance company in January 2015 that describes your coverage status during the previous year.
If you don’t have a qualified health plan for 2014 or qualify for an exemption—such as having low-income, being incarcerated, or being a member of a federally-recognized tribe—you’ll be charged a penalty on your tax return. This means you’ll owe additional tax or get a reduced tax refund.
However, if you have any of the following types of qualified policies, that give you minimum essential health coverage, you won’t face a penalty:
- Individual plans purchased through a state health insurance marketplace or broker
- Grandfathered health plans
- Employer-sponsored group plans
- COBRA coverage
- Union plans
- Student health plans
- TRICARE (military health coverage)
- Veterans’ health care programs
- The Children’s Health Insurance Program (CHIP)
- Peace Corp Volunteer plans
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