Sunday, Feb. 15 at 11:59 p.m. is the deadline to buy private, subsidized health insurance through Kynect, the state-run marketplace created under federal health reform.
If your annual income is above the federal poverty level and you don't buy a policy or enroll in Medicaid, and don't qualify for one of several narrow exceptions, you will be subject to a tax penalty from the Internal Revenue Service. (You may qualify for Medicaid if your income is less than 138 percent of the poverty level; Medicaid enrollment is open year-round.)
The penalty is $325 per person or 2 percent of household income, whichever is greater. "In many cases, this penalty could exceed the annual cost of insurance," the release said, giving these examples using "bronze" plans (the cheapest alternative, which has high deductibles):
- A 30-year-old in Lexington making $20,000 would qualify for a subsidy and pay $37.44 for a full year of bronze coverage, or pay a $400 penalty and remain uninsured
- A 25-year-old in Louisville making $40,000 would qualify for a subsidy and pay $604.08 for a full year of bronze coverage, or pay an $800 penalty and remain uninsured.
“Not only is insurance important for your physical health, it also makes financial sense,” Kynect Executive Director Carrie Banahan said in the release. “Why risk the possibility of being uninsured and facing a costly medical procedure and a tax penalty, especially when you may qualify for financial assistance to defray some of your premium cost? Don’t wait. Visit Kynect and enroll in healthcare coverage today.”
Private insurance on Kynect is subsidized by an advanced premium tax credit. Those who qualified for the credit will receive a 1095-A tax form, which provides information to help fill out Form 8962 as part of their federal tax returns. Individuals with questions about their Form 1095-A can call a special Kynect hotline at 1-844-373-2417. More information is available at kynect.ky.gov.
People on Medicaid, Medicare, the Kentucky Children's Health Insurance Program, catastrophic health insurance or insurance through an employer or other agency do not need Form 1095-A to file their federal taxes.