4 New Changes Impacting Health Insurance and Your Taxes - Paying Uncle Sam
We've hit January and the time has come for many of us to turn our attention to a subject we often dread, taxes. This tax season many of us will face new filing requirements or even receive new forms in order to remain in good standing with the government. In this post we'll quickly summarize the items you'll need to look and that you'll encounter as we head toward April 15th.
4) Determine If You Had Minimum Essential Coverage
2014 was the first year that citizens were required to carry health insurance that met the requirements of "Minimum Essential Coverage". These new Affordable Care Act compliant plans included great benefits like preventative care and maternity care and have gone a long way to improving the plan offerings at many insurance companies. Typically, anyone who bought coverage in 2014 probably had minimum essential coverage, but if you bought a short-term plan or didn't even obtain coverage, you may not have had qualifying coverage.
If you didn't have qualifying coverage, the first step is to determine if you qualify for an exemption by visiting the following link to the IRS website - Exemption Determination
Exemptions include that the coverage was unaffordable and premiums were simply too high for you to afford.
If you do qualify for an exemption from the Shared Responsibility Payment, you may use IRS Form 8965 to report your exemption from carrying an ACA plan.
3) Your W-2 Will Include A Value of The Health Insurance Benefits You Receive If Your Employer Provides Coverage
Employers will send copies of your W-2 in the next several weeks and if you or your spouse receive health insurance benefits at work you'll see a line item that contains the value of the health insurance benefits you received over the course of the year. These benefits are currently not taxable, but clearly the documentation of them leads many to be concerned about the plans for this information in the future. We do know that in 2018 employers that provide very generous benefits (over $25,000 a year) will be penalized and taxed for their "excessive" generosity.
2) You've Got To File If You Received A Subsidy
We have a few clients that have received benefits and financial assistance through the Federal Marketplace that haven't or don't file a federal tax return. Starting in 2014, anyone receiving any subsidy or financial assistance will need for file a Form 1040 and may not even file the Form 1040 EZ. Several years ago we wrote in a blog that the Affordable Care Act was going to benefit two groups, the insurance companies and the accountants, it looks as though we were correct!
1) If You Didn't Have Minimum Essential Coverage, Pay The Penalty
After determining that you didn't qualify for an exemption, that you didn't carry the correct coverage, or didn't have coverage for at least 9 months of the year, you may need to pay file your tax return and pay the penalty. In April you be subject to a maximum of 1% of your household income as a penalty for not obtaining minimum essential health coverage. The penalty is called the "Shared Responsibility Payment" if it makes you feel better having a nice name for it! If you continue without qualifying health coverage in 2015 your maximum penalty increases to 2% of household income.
If you have questions about obtaining a subsidy or need to get a health insurance quote please click Contact Us or simply call us at 713-422-2935, we'd love to help you navigate the universe of health insurance options and find a plan that fits your budget and your family's needs.
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