Background on the Insurance Mandate’s Tax Penalty
Effective January 1st, 2014, certain individuals (referred to as “applicable individuals”) will be required to maintain health insurance which meets a minimum standard (referred to as “minimum essential coverage”) for themselves and their dependents. Those who fail to maintain this “minimum coverage” will be required to pay a penalty on their tax return.
How to Avoid the Individual Health Insurance Mandate “Tax” Penalty
The new Government health insurance mandate requires that most individuals purchase health insurance, or you will end up paying a penalty on your tax return. Last week, the Supreme Court found the “Individual Mandate” in health care reform to be constitutional because the PENALTY is really a TAX. The intention of the individual penalty is to reduce the so called “Free Riding” that occurs in the health care market; (a free rider is someone who does not purchase health insurance until they need it, and then it may be too late for them to qualify for a plan, while the rest of us folks who have health insurance, end up paying more thru annual rate increases to cover those who do not have adequate protection. If you are looking for a way out of the mandate, here are 5 ways to avoid the penalty tax…
According to the bill, there are 5 ways to avoid paying the tax:
1. Apply for a religious exemption to avoid the health insurance tax
Claim that your religion (whether that be Christianity, Judaism, Islam or some other religious teaching), does not allow you to purchase health insurance. Good luck with that one.
2. Join an Indian Tribe to avoid the health insurance tax
3. Join a Health Care Sharing Ministry to avoid the health insurance tax
4. Renounce your U.S. citizenship to avoid the health insurance tax
If you are not a U.S. citizen, you don’t have to pay the penalty. However, this would be counter-productive if you are aiming to get on Medicare when you turn 65.
5. Go to Jail to avoid the health insurance tax
If you should do something to incarcerate yourself, you can avoid paying the penalty while in jail.
Any other ideas?