The Affordable Care Act, endearingly known throughout the
media and politics as Obamacare, was designed to increase the quality,
availability and affordability of health insurance for all Americans. By
expanding Medicaid eligibility and creating state-based insurance exchanges
where individuals and small businesses can purchase health insurance plans, the Affordable
Care Act could put consumers in charge of their own health care.
Since the Individual Mandate is now in effect, taxpayers
should be aware that the Affordable Care Act affects taxpayers in the following
ways this season:
Depending on age and living status, the changes taxpayers can
expect as a result of the ACA include:
Person- For those who have insurance, their plan must meet minimum
essential coverage in order to not pay a penalty. Plans that cover only
eye or dental care, or plans that only give a discount on services aren’t
considered full health coverage. Those who have this kind of insurance or
no insurance at all will need to get full coverage or else pay the annual
Couples- To avoid paying the annual penalty on income taxes, all
married couples must have a health insurance plan with benefits. Those who
have plans that lack dental or eye care coverage, as well as couples with
no insurance must purchase full coverage to avoid paying a penalty
Under the Affordable Care Act, all seniors are covered by Medicare. As
long as those over the age of 65 enroll in Medicare or another insurance
plan, they will not have to pay the annual penalty.
Business Owners- Larger business (those with 50 or more
employees) are required to offer health insurance with minimum essential
coverage to all of their full-time employees. If the business fails to
requirements listed in the statute, they will be forced to pay an annual
penalty. This penalty for business owners however will not go into effect
until 2015 in order to give owners time to prepare and find appropriate
coverage for their employees.
Business Owners- Small businesses (defined as those with less than 50
employees) are not required to provide health insurance in order to avoid
the annual penalty. Those small businesses who choose to offer coverage
qualify for an annual tax credit.
In 2014, the fee for uninsured people is going to cost $95
per adult. The fee for uninsured children is going to cost $47.50 per child.
This amount will increase each year, from 1% of a household's total income in
2014 to 2.5% of a household's total income in 2016. For more information on how the Affordable Care Act can affect you, please visit The Tax Doctor.