irs obamacare penalty in 2015 increasesOne of the provisions of the Patient Protection and Affordable Care Act (PPACA, also called Obamacare) is that those who don’t obtain health insurance are required to pay a tax penalty.

For the tax year 2014, the individual mandate penalty wasn’t too severe. If you didn’t have coverage, your penalty is the greater of either 1 percent of your yearly household income, or $95 per adult and $47.50 per child under 18. The maximum penalty for a family under this method is $285. For some Americans, paying the penalty for the tax year 2014 makes more sense than paying for health insurance.

This dynamic is likely to change for the tax year 2015. The penalty is stepping up, and that means that you need to plan for the coming year.

Higher Obamacare Tax Penalty in 2015

There is a more substantial PPACA tax penalty coming for 2015. For this year, those without insurance (and who don’t meet the exceptions to the rule) the penalty is the greater of 2 percent of household income, or $325 per adult and $162.50 per child under the age of 18. The cap this year is $975 for a family. You can see what a big jump that is from what was levied last year.

Tax year 2015 is the point at which many Americans see the penalty become more expensive than coverage. Right now, according to a survey from the Transamerica Center for Health Studies, about 28 percent of Americans think that paying health expenses out of pocket, plus the penalty, is less expensive than buying health insurance.

While this might have been true in 2014, it might not be the case in 2015, and as even higher penalties phase in 2016, and are adjusted for inflation following 2016, it becomes even less cost-efficient to pay the penalty instead of pay for coverage. According to the Transamerica study, about 80 percent of uninsured Americans spend less than $500 on health care expenses. For these Americans, it might still be somewhat cost-efficient to pay the penalty — at least for now.

The penalty for being uninsured is figured on your income tax return. Your penalty can increase your tax bill, or reduce your refund, depending on your situation. Before you accept the penalty, though, it makes sense to double-check your coverage options. First of all, if your income is less than 100 percent of the federal poverty level, you might now qualify for Medicaid, which would mean you could get health coverage for your family without paying for health insurance.

You can also check the exchanges to see if you qualify for a subsidized plan that would be manageable for you. Plans at the “bronze” level, as well as catastrophic coverage plans, are less expensive and might provide you with coverage that doesn’t break the bank.

As the year’s progress, the cost of being uninsured will only rise. If you want to avoid increasingly hefty tax penalties due to the PPACA, it’s time to start shopping around for health insurance.