ObamaCare Special Enrollment 2015: Should You Pay the Premium or the Tax?

A lot of lower middle class Americans are just finding out that they will have to pay more income taxes for the 2014 tax year than they expected because they didn’t or couldn’t sign up for ObamaCare in late 2013 or early 2014.

But for people in that situation, they now have a very important question to answer: “Which do you suppose will cost you more – signing up for government-subsidized health insurance for this year or losing out on getting the Affordable Care Act’s tax credit for having health insurance coverage when you file your income tax return next year?”

We can help you answer that question! And as it happens, it’s a very timely question that many people need to answer because there’s going to be a special health insurance sign-up period for Americans who weren’t aware that they were going to get hit with higher income taxes this year because President Obama’s political network of community organizers and Healthcare.gov navigators have really dropped the ball on telling people whether they’re at risk of getting hit with higher income taxes if they didn’t enroll for health insurance last year. That special enrollment period will run from Sunday, 15 March 2015 through Thursday, 30 April 2015.

But here’s the thing – depending upon how much your income is, for people who can reasonably expect to be healthy through the end of 2015 and not really need health insurance at all during the year, you can end up paying way more for your Obamacare health insurance coverage than what you might otherwise have to pay on your income taxes. It might actually make a lot more sense for you financially to not sign up for coverage now and to then reconsider your situation later this year when the health insurance signup period for 2016 begins on 1 November 2015.

And that’s assuming that you don’t consider the real and affordable alternatives to signing up for Obamacare’s government-subsidized health insurance to be more attractive.

Let’s talk about the numbers that you’ll need to weigh your decision. First, you’ll need to identify your annual income, which for many people, is something they can get from their income tax returns for 2014, which must be in the mail no later than Wednesday, 15 April 2015, so it’s an easy number to get.

Next, you’ll need to shop for the health insurance plan through your state’s or the federal government’s health insurance “marketplace“, which will ask you to enter your annual income and will tell you how much your subsidized monthly premium (or rather, your monthly bill) for health insurance coverage will be for the option you select.

Then enter those numbers in the tool below. Our tool also asks you to indicate how many adults or children would be covered by the health insurance and to identify your state so we can sort out whether your income is low enough to qualify for health insurance coverage through the government’s Medicaid program, which would mean you don’t have to worry about having to pay higher income taxes.

It’s that simple – we’ll have some more discussion after our tool’s results.

Warning: For those of you who choose to sign up for Affordable Care Act subsidized health insurance, please be aware that if you earn more income in 2015 than the amount you indicated when you signed up for that coverage (such as if you get a raise or change to a higher paying job), the amount of your Obamacare tax credit will be considerably lower, which means that your income tax bill will be considerably higher when you file your taxes next year. So if you do make more money than that this year, make sure you have an additional amount of money to cover the cost of your higher income tax bill withheld from your paychecks in 2015.

If that’s your situation, we have another tool to help you do the math for that too!

About This Tool

This tool is based on our more generic “ObamaCare: Should You Pay the Premium or the Tax?” tool, which is updated annually – this version specifically and only applies for the 2015 tax year.

Legal Disclaimer

Materials on this website are published by Political Calculations to provide visitors with free information and insights regarding the incentives created by the laws and policies described. However, this website is not designed for the purpose of providing legal, medical or financial advice to individuals. Visitors should not rely upon information on this website as a substitute for personal legal, medical or financial advice. While we make every effort to provide accurate website information, laws can change and inaccuracies happen despite our best efforts. If you have an individual problem, you should seek advice from a licensed professional in your state, i.e., by a competent authority (such as a licensed insurance broker, medical professional or legal services provider) with specialized knowledge who can apply it to the particular circumstances of your case.

Note that we didn’t include “Healthcare.gov Navigator” or “community organizer” in the category of “competent authority”.