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Friday, February 17, 2012 2:02:46 PM

What will the penalty be if I don’t get health insurance as mandated by the federal health care reform law?

Americans who do not have health insurance in 2014 will face financial penalties. The penalty will be $95 or 1 percent of a person's income, whichever is greater. The penalties are in full swing two years later, with fines increasing. By 2016, the annual penalty for someone who doesn't have health insurance will be $695 a person and $2,085 for a family, or 2.5 percent of income, whichever is greater.

This penalty will increase every year based on cost-of-living costs and will be imposed like a tax. If you don’t pay the penalty, the government could go after your tax refund for payment.

There are some exceptions, however. Someone is exempt if he or she:

▪ Carried coverage for at least nine months out of the year.

▪ Experienced financial hardship falling short of income requirements, with the cheapest insurance costing more than 8 percent of annual income.

▪ Is in prison.

▪ Has religious reasons for not having coverage.

▪ Is a member of a Native American tribe.

If you can’t afford coverage under the health care reform law, you may qualify for Medicaid, the government insurance program for poor and disabled Americans. Eligibility kicks in when your income does not exceed $14,404 for one person (133 percent of the federal poverty level) or $29,326 for a family of four.

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Laura Adams is a personal finance expert and award-winning author who is Senior Insurance Analyst for InsuranceQuotes.com. She represents Bankrate Insurance’s web properties in the media and works as an advocate to make sure consumers protect their financial futures by having the right kinds of insurance.

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