Health insurance is a must for farriers. Yet, according to the American Farriers Journal 2014 Farrier Business Practices Survey, there’s a sizable number who roll the dice and forgo insurance. As we ring in the New Year, there’s a new incentive to buy an insurance plan, courtesy of Uncle Sam.

When the Obama administration trotted out the Affordable Care Act (ACA) in the spring of 2010, it mandated that all Americans must buy health insurance. In 2014, the federal government began assessing penalties upon those who failed to do so. Although the penalty has been minimal in 2014 and 2015, that’s about to change.

According to an analysis of the ACA by The Henry J. Kaiser Family Foundation, the 2016 penalty is calculated as the greater of two amounts:

  1. A flat dollar amount equal to $695 per adult plus $347.50 per child, up to a maximum of $2,085 for the family.
  2. 2.5% of family income in excess of the 2015 income tax filing thresholds ($10,300 for a single person and $20,600 for a family).

ACA Penalties
Chart: The Henry J. Kaiser Family Foundation

Penalties for those who decline coverage in 2016 will average $969 — a 47% increase over those assessed in 2015. The flat fee also increases from $325 to $695. If 2.5% of your annual income is greater than $695, it will increase even more.

Because of these penalty increases, buying the Bronze-level health insurance would be a cheaper option for an estimated 3.5 million uninsured Americans who are eligible for ACA subsidies. Of course, they also face high deductibles. Another 7.1 million, though, might find that paying the penalty is a cheaper option.

As farriers, you face a much more complicated choice, though. When you’re climbing under several horses a day, it’s not a matter of if you’ll get hurt, but when. And while it might be cheaper in the short run to pay the penalty, the long-term consequences can be devastating.