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Cheapest Obama-Care Family Plan Will Be $20K

From CNS News:

IRS: Cheapest Obamacare Plan Will Be $20,000 Per Family

By Matt Cover | January 31, 2013

(CNSNews.com) – In a final regulation issued Wednesday, the Internal Revenue Service (IRS) assumed that under Obamacare the cheapest health insurance plan available in 2016 for a family will cost $20,000 for the year…

Did you ever think your family’s health insurance business would end up being regulated by the IRS? Lest we forget, the IRS is notorious for giving out bad advice to income tax filers. But, of course, they are also famous for their compassion and fairness.

The IRS’s assumption that the cheapest plan for a family will cost $20,000 per year is found in examples the IRS gives to help people understand how to calculate the penalty they will need to pay the government if they do not buy a mandated health plan.

The examples point to families of four and families of five, both of which the IRS expects in its assumptions to pay a minimum of $20,000 per year for a bronze plan. “The annual national average bronze plan premium for a family of 5 (2 adults, 3 children) is $20,000,” the regulation says.

And don’t worry, these premiums are going to shoot up just like the ‘penalty’ for not buying insurance are going to shoot up, once there is no going back.

Bronze will be the lowest tier health-insurance plan available under Obamacare–after Silver, Gold, and Platinum. Under the law, the penalty for not buying health insurance is supposed to be capped at either the annual average Bronze premium, 2.5 percent of taxable income, or $2,085.00 per family in 2016…

Whichever is higher.

To help illustrate these rules, the IRS presented examples of different situations families might find themselves in. In the examples, the IRS assumes that families of five who are uninsured would need to pay an average of $20,000 per year to purchase a Bronze plan in 2016.

Using the conditions laid out in the regulations, the IRS calculates that a family earning $120,000 per year that did not buy insurance would need to pay a "penalty" (a word the IRS still uses despite the Supreme Court ruling that it is in fact a "tax") of $2,400 in 2016.

Again, this penalty soon be far higher, probably even before 2016.

For those wondering how clear the IRS’s clarifications of this new "penalty" rule are, here is one of the actual examples the IRS gives:

“Example 3. Family without minimum essential coverage.

"(i) In 2016, Taxpayers H and J are married and file a joint return. H and J have three children: K, age 21, L, age 15, and M, age 10. No member of the family has minimum essential coverage for any month in 2016. H and J’s household income is $120,000. H and J’s applicable filing threshold is $24,000. The annual national average bronze plan premium for a family of 5 (2 adults, 3 children) is $20,000.

"(ii) For each month in 2016, under paragraphs (b)(2)(ii) and (b)(2)(iii) of this section, the applicable dollar amount is $2,780 (($695 x 3 adults) + (($695/2) x 2 children)). Under paragraph (b)(2)(i) of this section, the flat dollar amount is $2,085 (the lesser of $2,780 and $2,085 ($695 x 3)). Under paragraph (b)(3) of this section, the excess income amount is $2,400 (($120,000 – $24,000) x 0.025). Therefore, under paragraph (b)(1) of this section, the monthly penalty amount is $200 (the greater of $173.75 ($2,085/12) or $200 ($2,400/12)).

"(iii) The sum of the monthly penalty amounts is $2,400 ($200 x 12). The sum of the monthly national average bronze plan premiums is $20,000 ($20,000/12 x 12). Therefore, under paragraph (a) of this section, the shared responsibility payment imposed on H and J for 2016 is $2,400 (the lesser of $2,400 or $20,000).”

What could be more clear?

The IRS’s regulations for Obama-Care are going to make the income tax rules look straightforward by comparison.

This article was posted by Steve Gilbert on Friday, February 1st, 2013. Comments are currently closed.

One Response to “Cheapest Obama-Care Family Plan Will Be $20K”

  1. canary

    Obama has exempted Mexicans and foreigners here who are not US citizens but here legally working to be exempt from Obama Care.

    I do believe that is about 1/4 of the country statistic wise.




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