I am not a US citizen and one of the reasons I chose not to live in the USA, is the health care system. It is BAD! BUT, unless I was a millionaire, signing the ACA as you put it (I take it you mean joining) is the ONLY option. Paying the penalty for not participating would be so stupid there is no word strong enough to describe how stupid I would be not to sign that. Obviously I would assume that all people who make such an important decision as to what plan to join would actually READ the documentation to make sure they understand it and not rely just on FOX and friends tell me what to do. I clearly would not be so stupid as to say Fox and other biased media have said it is bad so I won’t sign it, because clearly FOX and other biased media have a conflict of interest. They get shit loads of advertising money from big pharma and other relevant industry participants (hospitals, doctors, insurance companies etc) so of course they have to agree with what they say, and they don’t want Obama care because they are afraid that that is the first step towards allowing the government to regulate how much a drug can be sold for, or in other words currently allow gouging.

Long story shot: OF COURSE I WOULD…. while not good, it is the best option I would have and a step in the right direction

Welcome to the iron grip of Employer Sponsored Insurance (aka: ESI).

It's been a tax benefit to both employers and employees since it's inception in 1942. Here's the briefest of histories:

In 1940, only about 12 million Americans ‒ less than 10% of the total population of 132 million ‒ had some form of health insurance coverage. This made sense in that most healthcare was sufficiently low‒cost and could be paid for out‒of‒pocket. What health insurance was available was mostly catastrophic-only coverage for the wealthy (who were the only ones who could afford it).

By 1950, only 8 years later, about one‒half of the population had some form of health insurance coverage.

What caused that explosion? Federal legislation with an unwieldy name that's largely forgotten. Known as "An Act to Amend the Emergency Price Control Act of 1942, to Aid in Preventing Inflation, and for Other Purposes" it was passed on October 2, 1942. Literally the next day, then President Franklin D. Roosevelt effectively froze wages with Executive Order 9250 Establishing the Office of Economic Stabilization.

The primary purpose of the act ‒ and the Executive Order ‒ was to freeze wages as a way to quickly and effectively stop inflation. That was absolutely necessary ‒ and it worked ‒ but it also left the door wide open for an unintended consequence ‒ using benefits instead of wages as a way to compete for a shortage of labor. ESI was officially born and the fact that there were ancillary tax benefits to both employers and employees was simply adding gasoline to the early stages of a small fire.

ESI today accounts for well over 110 million Americans which is easily more than 1/3 of the total population. What started as a tax break has morphed into the largest single pool of health coverage for most Americans ‒ the health insurance provided by their employer. [1]

Context is also critical. Here's a hospital bill for a typical delivery - from 1950 - In New York.

Even in 1950 - $165 bill wasn't enough to send the vast majority of Americans into bankruptcy.

On the other hand - it easily can today. Here's a delivery that "had complications." Not all do, of course, but the whole purpose of insurance is to eliminate this catastrophic financial risk.

But I digress ...

Both sides have benefited from ESI for decades - and Obamacare was unable to sever this tie.

When companies started exploring their options for complying with the Affordable Care Act a few years back, some likely considered not offering coverage at all, and instead sending their employees to the individual health exchanges with pre-tax money to help cover their premiums. Now that option is off the table. A rule the IRS issued last year states that using pre-tax funds to subsidize individual plans purchased on or off a public exchange violates the ACA, commonly known as Obamacare. And companies that do so could face fines in the form of a $100-a-day excise tax for each employee they offload onto the health exchanges.

[The IRS rule] doesn’t apply to companies that are already offering health coverage and providing pre-tax benefits related to it, such as health savings accounts that allow employees to put aside money tax-free that they can use to pay out-of-pocket expenses. Nor does it apply to companies that have fewer than 50 employees and choose to purchase plans on the federal or state small-business exchanges. That means the IRS rule primarily affects companies that are debating “pay vs. play”—not offering coverage and paying any fines associated with dumping employees onto the exchanges rather than offering an in-house health plan. [2]

So while YOU may prefer to be paid a higher wage - and then be able to use some of that money in a pre-tax way to pay for insurance outside of your employer, your employer has NO incentive to oblige your wish.

Is it crazy? Absolutely. Does this happen in ANY other industrialized country? Only 1 - South Africa. Can we/should we change it? Absolutely.

A good test of this is now on the ballot in Colorado for a vote in November of next year - single payer healthcare. Forget for a minute the connotation of "socialized" medicine that comes for the ride with the label "single payer" - it isn't. It's simply a different financing mechanism that takes employers out of the business of trying to manage health costs on both the coverage AND the delivery side. [3]

A much longer answer than what you wanted, I'm sure, but ESI is an accident of history that we need to address head-on. There is no other way (ultimately) to solve insanely high healthcare costs for average, hard-working Americans - as evidenced by this one chart - without ending our painful accident of history.

[1] Casino Healthcare
[2] The IRS Has Put a Stop to this Obamacare Workaround
[3] Colorado Puts Single-Payer Healthcare On 2016 Ballot

Closing the loophole is one - of many solutions needed to fix healthcare.

The fact is - the U.S. system is largely based on revenue and profits - not safety and quality.

Looking at the system nationally (which doesn't really exist) - its as if we had a car that gets 2 MPG - but 500 horsepower. You don't blame the engine for that performance - you simply say the engine has been optimized for horsepower (at the expense of MPG). That's the way I see our healthcare system.

Employer sponsored health benefits is really an accident of history. WWII to be precise. At that time - and due to a serious constraint of labor (men at war etc....) - the Government froze wages (the right thing to do under those unique circumstances), but left the door open for other forms of compensation as a way to attract/keep talent - most notably of course was rich benefits (including health, dental, vision, mental ... etc...).

Medicare and Medicaid were first attempts at solving the resulting imbalance - specifically for the retired and the poor - but as costs increased - health benefits became it's own battleground.

The first casualties in that battle were mental health benefits - then dental - then vision. Today, they're rarely included - and if they are - they're minimal relative to their cost.

Relative to core health benefits, the last giant to fall was Microsoft - which for years gave health benefits away for free to all employees. In 2011 they announced that (starting in 2013) they would - for the first time in their history - begin to shift some of that cost burden to employees - and it will likely increase over time (as healthcare costs continue to escalate).

Here's another metric. Starbucks spends more on employee health benefits than coffee beans.

When GM defaulted (and the Federal Government stepped in), a large contributing factor to their economic woes were employee health benefits. At the time - they shared that they paid more in health benefits per year than steel for the cars they manufacture. One condition of the Federal bailout? The White House submitted a letter to then CEO/Chairman Rick Wagoner asking for his resignation - which he did. In that sense - it could be said that healthcare took out the CEO/Chairman of one of America's biggest corporations - GM.

The point is simply this. There are many ways to shift the system away from revenue and profits - toward safety and quality. There are many ways to re-engineer our healthcare "engine" so that it gets less "horsepower" but more MPG. We need to look at ALL of the ways - including the role of employers in supporting the health of a workforce (both theirs and the country as a whole). That should logically include the tax benefits (if any) that currently apply to that support.

We haven't really had this debate - but it's coming - because the cost of our current system is literally pushing the entire economy to the brink - if not over a cliff. Today - our healthcare system is:

1. ... over $3 trillion annually
2. ... about 18% of our GDP
3. ... over $10,000 per capita - per year
4. ... an economic unit the size of Germany

... in a nutshell - unsustainable:

As Marc Bertolini (CEO of Aetna) said:

Well the way to solve an equation with too many variables is to eliminate some of those variables. So here’s my new definition of keep what you have. It’s about the individual and its their doctor and their hospital. It’s not about the employer, it’s not about the health plan – it’s about this relationship [between individuals and their healthcare provider].

Aetna CEO Bertolini Outlines 'Creative Destruction' Of Healthcare At HIMSS14

This is a qualifying life event for enrollment, yes.

You should also be entitled to COBRA continuation of your insurance to the year's end. While it won't be subsidized if the household income is low enough for help via the marketplace, your running total of out of pocket expenses toward the deductible won't be reset to zero, if you continue with COBRA.

If the family has already had considerable health related expenses, and remember to count prescription costs, it may make sense to continue your insurance rather than switch midyear. You get to enroll in Marketplace during November for the next year.

This is a time sensitive decision.

Employer-sponsored health insurance is a common way Americans access healthcare coverage, but it has potential disadvantages compared to options available through Welcome to the Health Insurance Marketplace® (the federal health insurance marketplace) or private insurers. Here's a breakdown of the key drawbacks:

1. Lack of Flexibility

• Limited Plan Options: Employers typically offer a set number of plans, which may not align with an employee's specific needs (e.g., high deductibles, narrow provider networks).
• Provider Network Restrictions: Some employer plans may restrict access to certain doctors, hospitals, or specialists.

2. Job Dependency

• Loss of Coverage with Job Change: Employer-sponsored insurance is tied to employment. Losing or changing jobs can result in a loss of coverage, creating gaps unless COBRA or other coverage is secured.
• Inflexibility for Self-Employment or Career Changes: Employees may feel "job-locked," staying in a job primarily for the health insurance benefits.

3. Cost-Sharing and Premiums

• Higher Out-of-Pocket Costs: While employers subsidize premiums, the employee’s share of premiums, deductibles, and copayments can still be high, particularly with family coverage.
• Unpredictable Cost Increases: Employers may shift more costs to employees over time, such as increasing premium contributions or deductibles.

4. Plan Design Limitations

• One-Size-Fits-All Approach: Plans may not accommodate specific medical needs, such as specialized care or comprehensive coverage for dependents.
• Minimal Customization: Unlike marketplace plans, where you can choose plans based on personal preferences (e.g., high-deductible health plans, HMO vs. PPO), employer plans often lack such customization.

5. Dependence on Employer Decisions

• Coverage Changes: Employers can change or reduce health insurance benefits, switch insurers, or discontinue coverage altogether, often with minimal input from employees.
• Limited Coverage During Leave or Layoff: Coverage during unpaid leave or layoffs may be limited, requiring employees to pay the full premium under COBRA.

6. COBRA Costs

• Expensive Continuation Coverage: If you lose your job, COBRA allows you to keep your employer plan temporarily, but the full cost (including the employer’s share and an administrative fee) can be prohibitively expensive.

7. Lack of Subsidies

• No Access to Marketplace Subsidies: Employees with employer-sponsored insurance are generally ineligible for premium subsidies on Welcome to the Health Insurance Marketplace® or state marketplaces, even if their employer coverage is costly (unless deemed unaffordable by ACA standards).

8. Dependent Coverage Challenges

• Spousal and Family Costs: Adding dependents to an employer plan can be significantly more expensive than buying a family plan through the marketplace.
• Limited Dependent Eligibility: Employer plans may not cover certain dependents or may offer less comprehensive coverage for them.

9. Geographic Constraints

• Coverage Limited to Local Areas: Many employer plans have networks designed around the company’s location, which may not be ideal for employees or dependents who live out of state or travel frequently.

10. Lack of Portability

• Non-Transferable Plans: Employer-sponsored insurance is not portable; it cannot move with you to a new job or retirement.
• Retiree Coverage Gaps: Some employers do not offer retiree health benefits, leaving individuals to find new coverage upon retirement.

When Other Options May Be Better

• Welcome to the Health Insurance Marketplace® or State Marketplaces:
• Subsidies can make coverage more affordable.
• A wider range of plans allows customization. No job dependency ensures consistent coverage.
• Private Insurance: Ideal for those who prefer more control over their coverage or need specialized plans not offered by employers.

Conclusion

While employer-sponsored insurance has advantages (e.g., tax benefits, employer contributions), its disadvantages often stem from lack of flexibility, job dependency, and rising costs. Evaluating other options such as marketplace or private insurance is particularly beneficial for those who prioritize portability, affordability, and customized coverage.

A2A

Of course the tax deduction should be scrapped.

I am flabbergasted that anyone would disagree.

A tax deduction means someone else must pay more tax to make up the difference.

So this is a tax increase on other people - people who do not get health insurance.

So low paid people who do not get health insurance must pay higher taxes to subsidize highly paid people who do.

Surely people should favour cutting taxes?
Surely they should favour simplifying taxes?
Surely they should not favour regressive taxes?

A simple rule: pay tax on the compensation you get.
It shouldn't matter if that compensation is cash, or gold bars or someone paying your mortgage - or someone paying your health care costs.
That is a compensation and you should pay tax on it.

This tax deduction is worth about $240billion a year (*)
So if it were abolished the government could tac another tax by $240billion.

Or keep other taxes the same and pay off the debt at a good rate.

(*)
USA healthcare is approx $8000/yr
About 100million people get private health
Marginal tax rate of 30%
= approx $240billion

Tax penalty? On a federal level, no. That single most hated part of the ACA was removed by the then Republican Congress. Democrats blasted them as “undermining” the ACA, but the effect was negligible and public support for the ACA has grown since, so more hot air in the partisan wars.

There are some states that have penalties for being uninsured however. Massachusetts of course, but also California, New Jersey, Vermont, Rhode Island, as well as the District of Columbia. But in most states, and on the federal level, the only penalty remaining is the natural penalty of being uninsured should you happen to incur large medical bills, very similar to the penalty for being uninsured if your house burns down.

Let's take a Person Earning say $50,000 a year and as part of their employment the benefits include

Now as for the COST of the plans, I can only tell you what my employer charges me

Health Insurance $66.69 per pay period - $1300 maximum out of Pocket / $300 Deductible / $15 copay
Dental Insurance is $8.79 Per Pay Period - $3000 max benefit per year - for my spouse and me it's $0
Vision Insurance $2.89 My employer pays this

The Employer pays their employees on a bi-weekly benefit. so with this income here is how it works

Total Weekly GROSS pay $1,923.08

Deductions Health Insurance $66.69
Dental Insurance $8.79
…Total Health Costs $75.48

GROSS PAY after Deductions of $1,847.60

Federal Income Tax 11% x $1,847.60 =$203.37
Federal Social Security Tax 6.2% x $1,847.60 = $114.55
Federal Medicare Tax 2% x $1,847.60= $36.95

State Income Tax 6.69% x $1,847.60 =$123.60
State Family Leave Tax 01.5% x $1,847.60 = $27.71

Total Tax $506.18

Net Pay Received $1,923.08 - 75.48 = $1,847.60- 506.18 = NET pay $1.341.42

Health Insurance, Dental Insurance, Vision Insurance, Flexible Spending Accounts, and Contributions to a retirement account are NOT taxable by either the State or Federal Government.

Simply put the answer is no. There are several reasons that it is justifiably not owed, the first if which is stated in your question.

1. It is unaffordable. If you feel that the cost of your health insurance is unaffordable that is a reason to not pay the “fine" for not having health insurance. The Government actually defines unaffordable as the premium being more than 8% of your gross income for the lowest cost plan. (Usually a Bronze plan with no coverage until you reach the deductible which is commonly also the maximum allowed out of pocket of $7,900.) Regardless of their definition, you can claim it as unaffordable and decline to pay a fine.
2. Your income is below the poverty level. There are technically 2 levels of the poverty line and it depends on which state you live in. Some states expanded Medicaid (the state sponsored medical insurance) to cover 138% of the standard poverty level which is approximately $17,000. Without the expansion the poverty line is around $12,000. (Those are for individuals and before taxes. The amount increases approximately $5,000 for each additional dependent in your household.) If you make less than that, you qualify for free coverage through the state and are not obligated to purchase health insurance of your own.
3. You have a financial hardship. I may or may not have heard of people purposely not paying their utility bill until they receive a shut off notice. They then pay in full and have received a “golden ticket” to avoid the tax penalty regardless of their income. If you are in financial hardship and have received a shut-off notice from your utility company you could send in that documentation and be relieved of your financial responsibility to pay the tax penalty. It may not be honest, but for people who don't agree with new government laws seem to find a loophole really easily.
4. You have a religious reason that you don't believe in health insurance. This one is not an easy as it may sound to document. You are not able to make up a religion claiming that it does not abide by the new federal law requiring health coverage. The government has specifically documented religious groups that they accept as exempt and require documentation that you are a member.
5. You decided to purchase a private plan that was not purchased through the Health Insurance Marketplace. According to the “rules" a “Health insurance plan purchased directly from a health insurance carrier qualifies as acceptable coverage. So a much less expensive “short term" plan is still an acceptable plan for health coverage despite those who wish to read the definition as a marketplace only plan. When completing your taxes a simple check of the box in the “had health coverage for all 12 months" is all you need. No supporting documentation is required either. (For all of those who say “but my accountant said that my 1095 form is required"! Your CPA is most likely wrong…ONLY people who purchased a Marketplace plans AND received a subsidy to pay for their plan are required to provide the 1095C form. Many employers provide a 1095 as well, but they are not required.)
6. The penalty is no longer required to be enforced. Yes this could have been number one of reasons you don't owe it but that wouldn't be very much fun. In 2019 the government declared that they will no longer enforce the tax penalty for not having health insurance. So ignore the questions and move on with your day.
7. Miscellaneous notes: There is a 3-month grace period that is allowed without insurance. If you find your way into a penalty through your own hard work of trying to aggressively pay it, then a 4 month period will only incur a 1 month penalty. If your income is slightly above $12/17,000 then you may qualify for an affordable option. A tax credit called a subsidy can lower your monthly premium payments to $0.00. The deductible on a plan like that is most likely close to zero and the maximum out of pocket is less than $1,000. This is rare but free plans are available and can really assist those on limited income that are a result of medical needs. I'm sure there are other items that are noteworthy but I will save those for an edit or another question...

In most cases, yes. Our insurance as guards gave two options:

Dogshit that was fairly priced and expensive dogshit.

I retained my private insurance which cost more than the dogshit but provided fair compensation compared to the ‘expensive’ dogshit insurance.

Aside from having to throw away letters nagging me about insurance I did not want around September and October, I faced no punishment.

Now, if you’re in a trade union, your insurance is likely a part of the system and there is no real refusal since everyone collectively pays for everyone else’s shit.

That said, like your pension and your union dues, this is explained to you in advance and, as far as I know, the pay you are promised is calculated ‘after expenses’ (union dues, pension payments, health insurance, training fees, etc).

That’s how the Carpenters’ Union explained it to me, anyway.

Of course not, but when is taxation based on fairness? There is the nanny state: government knows better than you do attitude that must be served.
Some will say it’s “fair” because taxpayers may have to pay for medical care for someone who could have been insured. Nice as that sounds, it’s iffy at best and is also not the best solution. Esp. as we are not putting taxes for cigarettes, alcohol, or junk food into the Medicaid budget now, are we?
The more people buy into the idea that the government should be in charge from cradle to grave the more things they will dictate and the more it costs. History has proven that.

The major advantages of buying ACA health plans via Healthcare.gov are guaranteed issue and comprehensive benefits. Guaranteed issue means the insurance companies must enroll everyone who applies and cannot bar treatment because of pre-existing conditions. The ACA health plans are required to cover the 10 essential health benefits specified in the Affordable Care Act which includes maternity, mental health, prescription drugs, and much more. The one downside is without the advanced premium tax credits (a.k.a. APTC, subsidies), they are rather expensive. For people who cannot afford an ACA health plan a good alternative is short term health insurance which is quite affordable because it does not cover all of the essential health benefits like maternity (no short term health insurance plans cover it). It is not guaranteed issue and can deny coverage to people with pre-existing conditions or significant health issues. It is ideal for healthy people who are concerned about accidents and illnesses. People can find these plans on my company’s website or its competitors websites.

At the end of the year when you do your taxes, you fill out a schedule in which you calculate how much total subsidy you’re eligible for based on your income, and how much total subsidy you actually received based on information which the marketplace will send to you. If you got more subsidy than you should have, that’s added to your tax liability. If you got less, that’s subtracted from your tax liability. (Or if you were due a refund, it’s subtracted from or added to your refund.)

I suppose if you make less than the marketplace threshold and would not have been eligible for subsidies at all, then you would have a very large tax liability.

This is a good reason not to overestimate your income. At any time of year, you can go into the Marketplace system and modify your estimate of your income. Depending on your state, you may become eligible for Medicaid. If you live in a state where that isn’t the case, I guess you need to decide whether you’ll be in a better position to pay the shortfall now, or next April.

The insurance company will never be involved. They are already being paid the subsidy portion of your premium, by the government.

Try this site where you can compare quotes:

//INSUREQUOTE.INFO/index.html?src=compare//

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I recommend that you wait until you are fully enrolled in the plan with your new employer before cancelling the individual plan you have under the Affordable Care Act (ACA). There are two reasons for that recommendation:

1. You never know what could happen to your job offer or insurance coverage with the new employer. There is no reason to give up the insurance you have before you secure new insurance.
2. Your individual coverage under the ACA has a 90-day grace period. That means that your coverage will not be cancelled for the first 90 days after you stop paying the premium. You can wait to pay or cancel the individual plan until after you are sure that you have new coverage with your employer. The individual plan will still pay claims for the first 30 days after you stop paying premiums and will still allow you to catch up the premium payments without cancellation for up to 90 days.

So, if your employer coverage is supposed to start on 1/1/21 then don’t pay the individual premium due for 1/1/21, but also don’t cancel the coverage, the 90 day grace period will start at that point. After you have secured coverage with your new employer you can then cancel the individual plan effective as of 1/1/21 after the fact. If worst case happens and the employer coverage is never put in force, then you can still make up the past due payment(s) on the individual plan within the 90 days, and not have any gap in your coverage.

Yes.

Unfortunately, unless it has only been a couple of months without qualifying coverage you will be required to pay the fee/penalty prorated for the months you did not have insurance.

Direct from HealthCare.gov:

You owe the fee for any month you, your spouse, or your tax dependents don’t have qualifying health coverage

There is good news for those who were without coverage for only 1 or 2 months:

If you have coverage for part of the year, the fee is 1/12 of the annual amount for each month you (or your tax dependents) don’t have coverage. If you’re uncovered only 1 or 2 months, you don’t have to pay the fee at all. Learn about the “short gap” exemption.

The expectation of the ACA is for every taxpayer to have continuous qualifying health insurance coverage in force.