Sign up for health coverage or pay heftier fine? 2016 enrollment deadline closing in

The deadline to sign up for insurance under the Affordable Care Act is closing in. Already about 400,000 Pennsylvanians have selected plans through www.healthcare.gov, but those who thought it would be cheaper to go without insurance and pay a fine in the past may be in for an unwelcome surprise this year.

That’s because the fines are going up.

If you went without insurance in 2014, you might have faced a base fine of $95 at tax time, or 1 percent of your income.

But Mark Steber, chief tax officer with Jackson Hewitt, said to watch out this year.

“For taxpayers who have yet to get insurance under the law, the penalty for when they do their tax return this year could be enormous,” Steber said. “And next year it could be even bigger.”

The penalty for not having insurance in 2015 is the greater of $325 or 2 percent of your income, capped at $2,484. The penalty for not having insurance in 2016 will be $695 or 2.5 percent of your income. Though tax preparers have been reaching out to clients, Steber said it may still come as a surprise to some.

“Those will be some difficult discussions to be sure,” he said.

There are exemptions, such not earning enough to file taxes, but designers of the law see the penalty as a necessary way of incentivizing people, especially those who are young and healthy, to get coverage.

Neil Deegan, head of Enroll America’s Pennsylvania chapter, said the organization has intensified outreach around Philadelphia, where the uninsured rate is about 12 percent.

“There is a huge push to get the word out,” said Deegan. “Not just about getting health insurance, the affordability, and the fine, but the availability of in-person assistance and help.”

People can now call 311 in Philadelphia to connect with enrollment help. Deegan also stressed that most people qualify for federal discounts on coverage. Even so, a recent Kaiser Family Foundation study found that for as many as 7 million uninsured Americans, the cheapest health plan available to them will still cost more than paying the penalty.

The deadline to sign up is Jan. 31.