23 Apr How can N.J. charge an Obamacare penalty?

Q. Now that the federal individual mandate/penalty ruled unconstitutional, I don’t understand how states can impose a penalty. What’s the deal with the New Jersey individual mandate?
— Not getting it

A. First, let’s correct the facts.

The federal penalty was not deemed unconstitutional.

“In fact, Supreme Court justice John Roberts classified the penalty as a fee and not a tax, and a 5-4 vote made the penalty constitutional by the highest court of the land,” said Kenneth Bagner, a certified public accountant with Sobel and Co. in Livingston. “Consequently, under the new tax act, Congress repealed the individual mandate for the federal government, which does not make it unconstitutional for the states to decide whether or not to institute a penalty.”

Starting Jan. 1, 2019 failure to have health coverage or qualify for an exemption may result in a Shared Responsibility Payment (SRP), Bagner said.

He said the amount of the SRP is generally based on your income and family size and is capped at the statewide average premium for Bronze health plans in New Jersey.

Bagner offered the following examples of what the SRP could be:

Individual taxpayer:
· Minimum: $695
· Maximum: $3,012

Family with two adults and three dependents and household income of $200,000 or below:
· Minimum: $2,085
· Maximum: $4,500

Family with two adults and three dependents and household income of $200,001 to $400,000:
· Minimum: $2,085
· Maximum: $9,500

Family with two adults and three dependents and household income of $400,001 and above:
· Minimum: $2,085
· Maximum: $15,060

He said household income is the income of all members in a household, including dependents.

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This story was originally published on April 23, 2019.

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