As House Ways and Means Committee deliberations kick off Monday afternoon on the GOP’s 429-page tax plan, Republicans are weighing the repeal of a contentious facet of the bill—the elimination of Obamacare’s mandate that people either buy insurance or face a penalty.
While President Trump has called for the elimination of the healthcare penalty, which Americans who decline to purchase healthcare are expected to pay at tax time, some GOP leaders have said removing the penalties could slow the bill’s fast track. The legislation is expected to be ready for full House debate by next week and on the president’s desk by Thanksgiving.
House Speaker Paul Ryan spent Sunday discussing the repeal of the Obama health law's requirement that people who can afford it must buy insurance coverage or face a penalty. While the White House wants the choice of whether or not to buy health insurance returned to private citizens, some GOP lawmakers say including removal of the penalties in tax reform could jettison a legislative victory Republicans need.
Repealing the penalty would be another piece-meal attempt to dismantle the Affordable Care Act after the Republican-led Congress has failed repeatedly to repeal and replace the law.
The penalty—called the individual shared responsibility payment--can be pricey for those who prefer to self-insure or do without healthcare insurance.
Currently the penalty is the higher of the following methods for both 2016 and 2017:
• 2.5% of your household income, capped at the national average premium for a "Bronze" health plan sold through the marketplace. This percentage is based on the portion of your household income that's above the tax filing threshold ($10,350 and $20,700 for singles and married couples, respectively, for the 2016 tax year).
• Or, at a minimum: $695 per adult and $347.50 per child under 18, up to a maximum of $2,085.
If you had coverage for part of the year, the fee is assessed at 1/12 of the calculated amount for each month you don't have coverage.
If it applies to you, the fee is due with your tax return for the year you didn't have coverage. For example, if you didn't have health insurance in 2016, any penalty due would be paid with the tax return you'll file in 2017.