Individual Mandate Payment

Maximum Individual Mandate Payment Amount for 2016 Released

The Affordable Care Act's "individual mandate" provision requires every individual to have minimum essential health coverage for each month, qualify for an exemption, or make a penalty payment when filing his or her federal income tax return. Recently, the Internal Revenue Service (IRS) issued Revenue Procedure 2016-43, which provides information needed to determine the maximum penalty that may be due for 2016.

Calculating the Payment

For tax year 2016, individuals will generally pay whichever of the following penalty amounts is higher:

  • 2.5% of the individual's yearly household income above his or her applicable filing threshold; or
  • $695 per person for the year ($347.50 per child under age 18).

The maximum penalty is capped at the cost of the national average premium for a bronze-level health plan available through a Health Insurance Marketplace in 2016. According to the IRS, the monthly national average premium for qualified health plans that have a bronze level of coverage and are offered through a Health Insurance Marketplace in 2016 is:

  • $223 per individual; and
  • $1,115 for a family with five or more members.

Our section on the Individual Mandate (Individual Shared Responsibility) provides information on the statutory exemptions from the individual mandate requirement.

 


Information provided HR360, the award-winning online HR library featuring easy-to-understand guidance on federal and state labor laws and Health Care Reform along with interactive HR tools and hundreds of forms and posters.The information and materials herein are provided for general information purposes only and are not intended to constitute legal or other advice or opinions on any specific matters and are not intended to replace the advice of a qualified attorney, plan provider or other professional advisor. This information has been taken from sources which we believe to be reliable, but there is no guarantee as to its accuracy.

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