In Revenue Procedure 2016-43 the IRS provided the 2016 monthly bronze premium amounts for use in computing the premium based limitations on the shared responsibility payments under IRC §5000A.
A shared responsibility payment is generally due for each month that a person fails to have minimum essential coverage for himself or herself or an individual they are eligible to claim as a dependent for tax purposes.
The initial monthly shared responsibility payment is 1/12 of the greater of:
- The flat dollar amount which is the lesser of
- The applicable dollar amount for each member of the family ($695 for 2016, indexed for inflation for future years). For individuals under 18, the applicable dollar amount is ½ of these amounts
- 300% of the applicable dollar amount for the year
- A percentage of the taxpayer’s household income, set at 2.5%
However, that payment is also capped to be no greater than the average monthly cost of bronze level coverage offered through exchanges that would provide coverage for the taxpayer and the “family” (those whom the taxpayer could claim as a dependent) for the period in question. The cost is taken by multiplying the average monthly premium cost (as published annually by the IRS) by the number of family members (but limited to no more than 5).
The 2016 average monthly bronze premium amounts computed by the IRS are:
- Individual amount - $ 223
- Maximum family amount - $ 1,115