Health Care Law Considerations for 2014
For most people, the Affordable Care Act has no effect on the 2013 income tax return they are filing in 2014. However, some people may need to make important decisions by the March 31, 2014 deadline for open enrollment.
Below are five things about the health care law you may need to consider soon.
• Currently Insured – No Change: If you already insured, you do not need to do anything more than continue your insurance.
• Uninsured – Enroll by March 31: The open enrollment period to purchase health care coverage through the Health Insurance Marketplace for 2014 runs through March 31, 2014. When you get health insurance through the marketplace, you may be able to get advance payments of the premium tax credit that will immediately help lower your monthly premium. Learn more at HealthCare.gov.
• Premium Tax Credit To Lower Your Monthly Premium: If you get insurance through the Marketplace, you may be eligible to claim the premium tax credit. You can elect to have advance payments of the tax credit sent directly to your insurer during 2014 so that the monthly premium you pay is lower, or wait to claim the credit when you file your tax return in 2015. If you choose to have advance payments sent to your insurer, you will have to reconcile the payments on your 2014 tax return, which will be filed in 2015. If you’re already receiving advance payments of the credit, you need to do nothing at this time unless you have a change in circumstance like a change in income or family size. Learn More.
• Change in Circumstances: If you’re receiving advance payments of the premium tax credit to help pay for your insurance coverage, you should report life changes, such as income, marital status or family size changes, to the Marketplace. Reporting changes will help to make sure you have the right coverage and are getting the proper amount of advance payments of the premium tax credit.
• Individual Shared Responsibility Payment: Starting January 2014, you and your family have been required to have health care coverage or have an exemption from coverage. Most people already have qualifying health care coverage. These individuals will not need to do anything more than maintain that coverage throughout 2014. If you can afford coverage but decide not to buy it and remain uninsured, you may have to make an individual shared responsibility payment when you file your 2014 tax return in 2015. Learn More.
Tax On Wheels LLC is available to answer your healthcare reform tax questions. Simply give us a call at 803 732-4288.
Starting January 2014, you and your family must either have health insurance coverage throughout the year, qualify for an exemption from coverage, or make a payment when you file your 2014 federal income tax return in 2015. Many people already have qualifying health insurance coverage and do not need to do anything more than maintain that coverage in 2014.
Qualifying coverage includes coverage provided by your employer, health insurance you purchase in the Health Insurance Marketplace, most government-sponsored coverage, and coverage you purchase directly from an insurance company. However, qualifying coverage does not include coverage that may provide limited benefits, such as coverage only for vision care or dental care, workers’ compensation, or coverage that only covers a specific disease or condition.
You may be exempt from the requirement to maintain qualified coverage if you:
A special hardship exemption applies to individuals who purchase their insurance through the Marketplace during the initial enrollment period for 2014 but due to the enrollment process have a coverage gap at the beginning of 2014.
For any month in 2014 that you or any of your dependents don’t maintain coverage and don’t qualify for an exemption, you will need to make an individual shared responsibility payment with your 2014 tax return filed in 2015.
However, if you went without coverage for less than three consecutive months during the year you may qualify for the short coverage gap exemption and will not have to make a payment for those months. If you have more than one short coverage gap during a year, the short coverage gap exemption only applies to the first.
If you (or any of your dependents) do not maintain coverage and do not qualify for an exemption, you will need to make an individual shared responsibility payment with your return. In general, the payment amount is either a percentage of your income or a flat dollar amount, whichever is greater. You will owe 1/12th of the annual payment for each month you (or your dependents) do not have coverage and are not exempt. The annual payment amount for 2014 is the greater of:
The individual shared responsibility payment is capped at the cost of the national average premium for the bronze level health plan available through the Marketplace in 2014. You will make the payment when you file your 2014 federal income tax return in 2015.
For example, a single adult under age 65 with household income less than $19,650 (but more than $10,150) would pay the $95 flat rate. However, a single adult under age 65 with household income greater than $19,650 would pay an annual payment based on the 1 percent rate.
More Information
Find out more about the individual shared responsibility provision, as well as other tax-related provisions of the health care law at www.irs.gov/aca.
For more information about your coverage options, financial assistance and the Marketplace, visit HealthCare.gov.
For help with questions about how Health Care reform affects your taxes call Tax On Wheels, LLC at 803 732-4288.
For most people, the Affordable Care Act has no effect on their 2013 federal income tax return. For example, you will not report health care coverage under the individual shared responsibility provision or claim the premium tax credit until you file your 2014 return in 2015.
However, for some people, a few provisions may affect your 2013 tax return, such as increases in the itemized medical deduction threshold, the additional Medicare tax and the net investment income tax.
Here are some additional tips:
Filing Requirement: If you do not have a tax filing requirement, you do not need to file a 2013 federal tax return to establish eligibility or qualify for financial assistance, including advance payments of the premium tax credit to purchase health insurance coverage through a Health Insurance Marketplace. Learn more at HealthCare.gov.
W-2 Reporting of Employer Coverage: The value of health care coverage reported by your employer in box 12 and identified by Code DD on your Form W-2 is not taxable. Learn more.
Information available about other tax provisions in the health care law: More information is available on IRS.gov regarding the following tax provisions: Premium Rebate for Medical Loss Ratio, Health Flexible Spending Arrangements, and Health Saving Accounts.
Tax On Wheels, LLC is available to answer your health care reform tax questions. Simply call us at 803 732-4288.
You may be wondering if you have to report the value of your employer-sponsored health insurance coverage, which may appear on your W-2, Wage and Tax Statement when you file your 2013 federal income tax return.
Here is what you need to know about the value shown on your W-2.
See this W-2 page on the IRS Website for more information. You may also contact us at Tax On Wheels, LLC if we may be of assistance to you in navigating the tax requirements of the Affordable Care Act. We can be reached at 803 732-4288.
IRS YouTube Videos:
IRS Podcasts:
More Information
Find out more about the tax-related provisions of the health care law at IRS.gov/aca.
Find out more about the health care law at HealthCare.gov.
There are a few basic tips to keep in mind about the new health care law. Health insurance choices you make now may affect the income tax return you file in 2015.
1. Most people already have qualified health insurance coverage and will not need to do anything more than maintain qualified coverage throughout 2014.
2. If you do not have health insurance through your job or a government plan, you may be able to buy it through the Health Insurance Marketplace.
3. If you buy your insurance through the Marketplace, you may be eligible for an advance premium tax credit to lower your out-of-pocket monthly premiums.
4. Your 2014 tax return will ask if you had insurance coverage or qualified for an exemption. If not, you may owe a shared responsibility payment when you file in 2015.
What should you do now?
If you or your family does not have health insurance, find out more now. Talk to your employer about the coverage they offer, or visit the Marketplace online.
Find out more about the health care law and the Marketplace at www.HealthCare.gov.
Find out more about the premium tax credit and the shared responsibility payment at www.IRS.gov/aca.
From USA.gov
If you’d like your health coverage to begin January 1, 2014, be sure to enroll in the Health Insurance Marketplace by December 23, 2013.
There are four ways to apply for health insurance through the Marketplace: online, by phone, in person, and by mail.
Although December 23 is the deadline for coverage beginning January 1, you can apply for Marketplace coverage after December 23. Open enrollment runs through March 31, 2014.
I have been assisting a number of clients with the expected tax consequences of the Affordable Care Act also known as Obamacare and I am finding that for the most part people are either misinformed or uninformed. There is also a great deal of fear and trepidation regarding the change to Obamacare. Humans are predisposed to the status quo. No matter how bad the situation, the known tends to be perceived as a better alternative than the unknown.
I have talked to clients who are battling ongoing chronic illnesses and who literally have no health insurance whatsoever, none, zero, zip, nada. But when I tell them about the availability of coverage under the Affordable Care Act as well as the possibility of receiving subsidies to reduce the out of pocket cost to even reasonably high income earners, not to mention the tax penalty provisions for those who don’t have coverage in place by January 2014, these clients tell me they don’t know about this Obamacare thing. They say they have heard bad things about this Obamacare and they don’t want to get caught up in something that might bring ridicule and embarrassment upon them.
Look, I get it. You are a family four and you are earning darn near $100,000 a year. You don’t want to put on your tuxedo and show up at the cocktail party to brag about how you qualified for a small healthcare premium subsidy under Obamacare. But if you are sick and you have no coverage whatsoever, I’m not seeing the downside to this deal. And anyone who tries to discourage you from signing up for coverage that just might save your life has a special seat in Hades with their name on it just waiting for them.
Yes the Affordable Care Act website is currently FUBAR and it may take some time to get it functioning correctly. So what? I defy you to name one website anywhere that functions correctly all the time. This is a no lose situation for most of us and many of us have already won by being able to keep our kids on our healthcare plan up to age 26 or eliminating pre-existing conditions rules. So as soon as the website is available get online and signup. If the website isn’t working get on the phone and call to sign up or submit a paper application but get it done.
If Tax On Wheels, LLC can be of assistance to you in helping you understand the law and the tax consequences that flow from it please feel free to give us a call at 803 732-4288. Click here to view a special page we have set up to direct you to the resources that can help you understand how Healthcare Reform works.
September 25, 2013
The federal government has released the rates for the new healthcare exchanges and the news is good if you are an older healthcare consumer. Younger consumers should probably plan on paying slightly more than they are accustomed to paying. In Columbia, South Carolina the lowest cost plan that meets the new requirements under Healthcare Reform is $166.00 which is lot more affordable than many sources had led us to believe it was going to be.
This $166 premium will buy coverage under a bronze plan, which may not provide the level of coverage that you want. But the choice will be yours whether to buy a more comprehensive coverage at a higher cost.
The Wall Street Journal seems to be the first out with the story and they are behind a pay wall. So if you don’t have a subscription you won’t be able to read the entire story. However, they have graciously provided a state by state chart located here under the tab labeled graphics. This should be the big news story today so more news outlets should have the same information.
Update:
The Washington Post as well as The New York Times quickly follow with their own stories about the cost of plans on the healthcare exchanges.
As always, please feel free to contact Tax On Wheels, LLC at 803 732-4288 if you have additional questions.
September 24, 2013
Politics aside, how could coverage improve for you & your loved ones?
Health care reform has many fans and many detractors. Amid all the sound and fury, the plain facts risk being blurred. So here is a look at where the reforms stand, and what they potentially offer you.
Here is how the health care exchanges will operate. According to healthcare.gov, open enrollment in the new health insurance exchanges is set to start on October 1; the open enrollment window for 2014 closes next March 31. Coverage you purchase via these exchanges becomes effective as soon as January 1, 2014. The federal government refers collectively to the 51 exchanges (one for each state and one for the District of Columbia) as the Health Insurance Marketplace. The federal government is running 34 of the 51 exchanges; others will be run by the respective state governments.1,2
When you visit the Health Insurance Marketplace online, you will be asked to fill out a form (with household size and income as key details) and then be presented with a roster of health insurance plans available in your area. You are also supposed to be notified if you qualify for lower out-of-pocket costs, or the federal Children’s Health Insurance Program or Medicaid.1
All plans offered through the exchanges will be from private insurers, and all of these plans will offer the same primary set of benefits. To make comparisons of price, benefits, and features easier, plans are slated to be presented in four categories – bronze, silver, gold, and platinum.1
Not all applicants will enroll online. Paper applications will also be provided starting October 1 (and for the record, may be downloaded). Applying by mail is possible; applying in person is possible with the assistance of a Navigator – a customer service representative for the HIM. The Navigators aren’t supposed to recommend this or that plan or plan option; they are to offer impartial guidance. Some states are requiring them to be insurance-licensed.1,2
The ACA is also inspiring private-sector imitators. Aon Hewitt has started its own private online health insurance marketplace for 2014, with more than 330,000 employees projected to enroll and 17 large U.S. companies already aboard.3
Here is how you benefit as a result of the reforms. Starting in 2014, insurers can’t cancel your policy due to an illness, and can’t put lifetime or annual dollar limits on payments for someone’s medical expenses. Young adults may stay on a parent’s health plan until age 26, whether they live at home or not. Also on track for change: No health plan will be able to turn down an adult or child applicant due to a preexisting medical condition or illness. Health plans will no longer be able to charge you for annual checkups and preventive care measures (such as cancer screenings and immunizations) in 2014. Health insurance premiums can no longer vary by gender.4,5
Medicare recipients will no longer have to pay out-of-pocket costs for common forms of preventative care such as vaccines, diabetes, cancer and cholesterol screenings and annual wellness checks. The infamous prescription drug “doughnut hole” may close altogether by 2020: while Medicare recipients got a 50% discount on brand name drugs and a 14% discount on generic drugs in 2012, those percentages will approach 75% by 2020.3,4,5
The federal government will effectively subsidize health insurance coverage for millions of lower-income Americans (about $5,000 per individual) in 2014 as they enroll in health plans through the HIM or buy coverage from health insurance companies selling individual and small group policies. The reforms could make as many as 17 million Americans Medicaid-eligible next year. In addition, more than $1.1 billion in rebates have been sent from insurance companies to consumers as a byproduct of the reforms.3,4
Here are the known problems & issues. As the Affordable Care Act represents an unprecedented revision to health insurance in America, there could be delays getting the HIM up and running by October 1. In addition, a tiny percentage of Americans will still be without health insurance. The requirement for larger employers to offer health insurance plans to their employees has been delayed until 2015.6
Here are things you should look out for in the future. Medicare Advantage plans will receive less and less money from the federal government due to the reforms: payments to Part C plans are going to shrink roughly $150 billion by 2022, so if you have Part C coverage, you will want to keep an eye on the plan premiums as they might gradually rise. It could be that the online health insurance exchanges produce a healthy competition that leads insurers to lower prices for coverage in the next few years; that remains to be seen. Not all states want to expand Medicaid; they can opt in or out.4,5
Try to avoid getting caught up in the sound and fury with health care reform; stay focused on what you can or cannot do with it. We have established a dedicated page on this website to provide comprehensive, accurate and up to date information regarding Healthcare Reform and you can access this resource by clicking on the red and blue link on the right side of this page or simply click here . And as always, please feel to contact Tax On Wheels, LLC at 803 732-4288 if we can be of assistance to you.
Citations.
1 – healthcare.gov/what-is-the-health-insurance-marketplace/ [9/17/13]
2 – usatoday.com/story/news/nation/2013/09/09/obamacare-health-insurance-navigators-draw-scrutiny/2787239/ [9/9/13]
3 – forbes.com/sites/brucejapsen/2013/09/17/walgreen-joins-rush-to-employer-exchanges-an-alternative-to-obamacare-marketplace/ [9/17/13]
4 – consumerreports.org/health/resources/pdf/ncqa/The_Affordable_Care_Act-You_and_Your_Family.pdf [9/17/13]
5 – marketwatch.com/story/obamacare-explained-in-plain-english-2013-09-11 [9/11/13]
6 – finance.yahoo.com/news/q-impact-health-law-delay-businesses-211823119.html [7/3/13]
9/23/2013
In case you have been living under a rock and are unaware of all the noise surrounding the introduction of a major portion of the Affordable Care Act (Obamacare), we would like to remind you that Healthcare Reform is finally about to implement its most significant feature, affordable healthcare for everyone.
If you are so busy that you only read headlines and view broadcast snippets, you may have fallen under the impression that Obamacare has been defunded, it has not. There was a vote by one house of congress to defund Obamacare. If you will recall from your 8th grade civics class lessons, it will take the additional action of the other house of congress and the signature of the President to affect any action of this sort. Both of whom have indicated that there is no chance any such action is forthcoming.
So beginning in one week, the healthcare marketplace (exchanges) will be available in all 50 states. Despite a great deal of discussion surrounding shutting down the government, we are being told by very trustworthy sources that Obamacare is a speeding train that cannot be stopped. For those of us that already have health insurance coverage there will be little to no change. But for those people who were previously unable to acquire health insurance coverage you will be able to sign up for affordable coverage that begins effective January 1, 2014.
There has been a great deal of misinformation disseminated about Healthcare Reform and you may be confused about what is or isn’t true. For this reason we have dedicated a special page on this website to try to help you figure out how Healthcare Reform affects you personally. We have provided resources that we believe to be credible and accurate. You will find a link to the Healthcare Reform Information Page down the right side of this website or just click here to be taken to the resource.