Stiffer health insurance penalties expected in 2015

LOS ANGELES (KABC) -- The time of year has arrived when Americans need to sign up for health insurance, or face a financial penalty.

For 2015, the penalty is quite a bit stiffer than it was this year. In fact, it can be more than three times as much.

"The increased penalty is really to make sure that consumers know there is a big financial consequence for not having insurance," said Dr. Laura Adams with InsuranceQuotes.com.

The website is a free online resource and marketplace where consumers can get quotes on health insurance. Plus, the website has a penalty calculator.

The penalty is calculated as a flat rate or a percentage of income, whichever is greater. For example, for an adult the flat rate penalty goes from $95 to $325. For a family, it can go from $285 to $975.

"When it comes to collecting this penalty, for most Americans what is going to happen is their tax refund will simply be lower than it would be otherwise, so the penalty is just going to be deducted right out of your refund," said Adams.

Despite the risk of paying a fine, one survey shows four out of 10 Americans said they would rather pay up than buy insurance. Which is not a good idea, because even a broken leg could cost $10,000.

"I think things are really going to change, as these penalties begin to creep up in 2015, 2016 and beyond it really will become much more of a financial burden on consumers not to have coverage," said Adams.

The only way out of having to get health insurance is if you qualify for a hardship that prevented you from signing up for a health plan, such as homelessness, eviction, foreclosure, domestic violence, or death of a close family member.

Open enrollment for Covered California and other health plans begins on Nov. 15 and ends Feb. 15. The penalty will increase even more in 2016 and beyond.