OBAMAmess: Penalty for not having Insurance can run as high as $12,000.00 ... and that's just for 2014

If you're opting out of the health-care coverage required by the Affordable Care Act, make sure you understand how much you'll owe Uncle Sam as a result.

For a family of five, the penalty could be as high as $12,240 for the 2014 tax year, experts say. And for many people, the penalty will rise sharply in 2015 and 2016.

The massive health-care changes passed in 2010 are phasing in, and this is the first year most Americans must have approved health insurance. Those who don't will owe a penalty under the Individual Shared Responsibility Provision. It's due with your income taxes, payable by April 15, 2015.

While most people will probably obtain qualified health coverage through an employer or an exchange, there will be others who owe the penalty. Eddie Adkins, a health-care and benefits specialist at Grant Thornton in Washington, says this group will likely include affluent and wealthy people who want to self-insure or use a so-called nonconforming policy that doesn't meet Affordable Care Act standards.

Then there are the "young invincibles": healthy young adults, typically in their late 20s or early 30s, who will get little or no tax credit to reduce their premiums. Many would rather spend the cost of health coverage, which can run from several hundred to several thousand dollars a year, on something else, such as paying off college loans.

For those who are thinking of opting out, here's what you need to know. To begin with, the penalty is either a flat amount or 1% of your household income, whichever is greater. For 2014, the flat amount is $95 per adult and half that for children under 18, with a cap of $285 per family.

The flat penalty rises steeply in the future, to $325 per adult in 2015 and $695 in 2016, plus half that per child, up to a maximum of $975 in 2015 and $2,085 in 2016.

The percentage-of-income penalty rises quickly as well—to 2% of income in 2015 and 2.5% in 2016. As with the flat penalty, there is also a cap on the maximum payment. It rises no higher than the average cost for a family of five under a bronze-level Affordable Care Act-approved plan, according to Kristin Esposito, a tax specialist at the American Institute of CPAs.

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