The Patient Protection and Affordable Care Act

The Patient Protection and Affordable Care Act (ACA) includes health insurance and tax law changes. Several measures of the Affordable Care Act, also known as Obamacare, have been implemented, but the most significant changes take effect in 2014 and 2015, including:

bulletIndividual mandate

Requires most Americans to have health insurance starting on Jan. 1, 2014. Coverage can be obtained through employer-sponsored plans, government programs such as Medicare or Medicaid, private plans or through the new federal or state marketplaces, also called health insurance exchanges, that will be available beginning on Oct. 1, 2013.

 
bullet Premium tax credits and financial assistance

Available to qualifying individuals who don't have access to employer-provided coverage and purchase health insurance through a marketplace. Eligibility and amounts are based on the cost of marketplace premiums and your household size and income. The credit will be paid directly to the health insurance company to help cover monthly payments. If you elect to receive a lesser credit or no credit at all, you can claim the refundable credit on your 2014 tax return (due April 2015).

 
bulletExcise Tax (penalty for uninsured)

If you don't have health insurance for a total of 3 or more months in 2014, you may be subject to a penalty payable on your tax return due April 2015. The amount is based on the number of uninsured individuals in your household and household income. However, a number of exemptions are available (see Tax News - Winter 2014).

 
bullet Small business mandate

Starting in 2015, small businesses with more than 50 full-time equivalent employees must offer health insurance or pay an excise tax (penalty).

For more information, click (here).

Calculators

Tax Credit Calculator

The ACA included a premium tax credit to help individuals and families purchasing insurance through marketplaces pay for coverage. According to a study by the Kaiser Family Foundation, 48% of Americans may qualify for tax credits to help pay for their health insurance coverage. These credits average nearly $2,700 in 2014 and reduce the premium for the second-lowest-cost federal marketplace plan (Silver) by an average of 32%. Eligibility and amount are based on several factors, including household income and number of people in the household. Need help figuring out if you qualify? Use this handy Affordable Care Act Tax Credit Calculator.

Penalty Calculator

Uninsured Americans who choose not to get coverage will be subject to paying a penalty, starting on 2014 tax returns (due April 2015), that will increase each year through 2016. The amount depends on number of months you're uninsured, household income and number of uninsured adults and children in the household. Calculate your 2014 penalty amount with this handy Affordable Care Act Tax Penalty Calculator.

 

 

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