The IRS will collect penalties through your tax return if you do not take action. To find out more, make sure you’re covered for 2015.
There are just ten days left in the open enrollment period. If you’re not sure that you or someone in your family will have health insurance at the beginning of next year, you may want to check out the Health Insurance Marketplace that offers coverage in your area. Our tax experts report that the last day to enroll in a qualifying plan is December 15, 2014. Enrolling by this date will guarantee coverage at the start of the year.
Why is coverage important?
The Affordable Care Act made it a requirement for everyone to have health insurance through a qualifying plan. If individuals do not purchase a qualifying insurance plan (Children need coverage too. Adults are also required to purchase plans for any dependent children in their households.), individuals will end up paying a penalty.
Think of healthcare premiums like monthly membership dues for your favorite social club or professional organization. The club can be anything hobby related—perhaps you sew, love motorcycles, or just enjoy doing projects that improve the community—any event where you get together with others who share a common interest. Without dues from many members, your club can’t undertake service projects or throw social get-togethers over mimosas and crab cakes for all of its members. Health insurance works similarly. Without a large pool of participants that regularly pay monthly premiums, health insurance companies cannot pay for medical bills when healthcare providers submit claims.
How does this have ANYTHING to do with taxes?
Health insurance became a tax topic when the Affordable Care Act came about. In order to enforce the requirement that everyone MUST have insurance, it was decided that the penalties would be collected through an avenue that affects almost every American—taxes. The Affordable Care Act also uses taxes to help some people afford health insurance through tax credits and subsidies.
What’s a Health Insurance Marketplace?
It’s an organization that the federal government and some states provide to help people enroll in health coverage.
What is the penalty if I do not have insurance in 2015?
Americans who do not have insurance will be required to pay the greater amount of:
- 2% of your yearly household income, or
- $325 per person for the year ($162.50 per child under 18).
How do I find out more about the ACA?
Like all laws that have anything to do with taxes, our professionals know best. Visit Liberty Tax Service’s blog for more information.
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