The Patient Protection and Affordable Care Act, also known as Obamacare, is controversial for many reasons, and one of them has to do with the penalties it imposes on those who don't get qualifying insurance coverage. But many people are still confused about exactly how the Obamacare penalties work.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, goes through the Obamacare penalty provisions to discuss the details. Dan notes that the penalties are $95 for each adult and $47.50 for each child in any given family, up to a maximum total of $285. But you also have to look at your income to see if you could owe more. Dan emphasizes that while most people think of the penalty as being 1% of income, that 1% only applies above your tax filing limit, which was $10,000 for single filers and $20,000 for joint filers in 2013. Moreover, Dan notes that the penalty can't be more than the average national premium for bronze-level policies, which is estimated to be around $4,500 to $5,000 for an individual plan. Dan concludes that the penalties can in fact be substantial, but it's important to know exactly what you might owe before making a decision about coverage.

Don't let Obamacare confuse you
Provisions about Obamacare penalties are unnecessarily complex, but you don't have to feel like you're in the dark about the Affordable Care Act. In only minutes, you can learn the critical facts you need to know in a special free report called "Everything You Need to Know About Obamacare." This free guide contains the key information and money-making advice that every American must know. Please click here to access your free copy.

Fool contributor Dan Caplinger and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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