The Patient Protection and Affordable Care Act (PPACA), more commonly known as “ObamaCare,” includes a mandate that most Americans be covered by health insurance or pay a penalty for non-compliance. Individuals will be required to maintain “minimum essential coverage” for themselves and their dependents. Some individuals will be exempt and others will be given financial assistance to pay for their health coverage.
 
 “Very soon, many Americans will face a cost-benefit decision on whether to remain uninsured or pay for health care coverage.”
- Andy Erwin, Tax Services Manager, ATBS
Below are some key dates and figures you should know now:
  • Starting in 2014, if your carrier doesn’t offer health insurance or you are an owner-operator, you will be able to buy it directly in the Health Insurance Marketplace (often referred to as “exchanges”). Individuals and small business will be able to buy health insurance on the exchanges that meet the “minimum essential coverage” definition. The exchanges will offer levels of coverage for consumers to choose from (currently called Bronze, Silver, and Gold for the lowest to highest-cost plans).
  • Also effective January 1, 2014, tax credits will become available to those with incomes between 100% and 400% of the poverty line who are not eligible for other affordable coverage.
  • For individuals that choose to remain uninsured during 2014, there will be a penalty tax levied and it will start being collected on tax returns for 2014 that are filed with the IRS in 2015. The penalty will phase in from 2014 to 2016 and will be based on which is greater: a flat-dollar amount per individual or a percentage of income above the amount that triggers the requirement to file a return. The chart below illustrates potential penalties for a family of four, with a minimum amount of income required to file a return at $20,000. 
*Penalty 2014:  Greater of $285 or 1% of income over filing requirement
** Penalty 2015:  Greater of $975 or 2% of income over filing requirement
*** Penalty 2016:  Greater of $2,085 or 2.5% of income over filing requirement
  • Some will be exempt from the penalty tax, including those with a household income below the threshold for filing a tax return, those that can’t afford insurance because their premiums exceed 8% of their household incomes, and those who go without coverage for less than three consecutive months during the year. 
The bottom line. Very soon, many Americans will face a cost-benefit decision on whether to remain uninsured or pay for health care coverage. For some, the cost of paying the penalty will be much lower than paying for health insurance. Those who don’t pay the fine will not be hit by IRS liens or levies, but the IRS can offset refunds, including those due to refundable credits.
The PPACA is very complex and as more information is released about the details, Team Run Smart will be here to provide you guidance!

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Comment ()


I can see there are so many fluctuations in these laws. But it is not very easy to get used to them.
http://feelday.com

April 19, 2013 1:22:08 AM

that's true some people should think before they put something to paper

March 31, 2013 17:35:30 PM

I guess we'll have to wait alittle longer for Congress to fix the problem instead of "painting over it"

March 31, 2013 16:48:26 PM

Too many laws and regulations. Burdensome.

March 31, 2013 10:16:26 AM

Interesting article. For those that purchase insurance now I wonder how these "exchanges" will work? Will the high deductible policies become more and more popular?

March 30, 2013 15:49:14 PM

well the soon ovomitcare is taken off the books the better same goes for getting the killer of the american trucker and there families

March 30, 2013 5:16:30 AM

Thanks for the informative article.

March 26, 2013 18:00:32 PM

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About Andrew Erwin

Mr. Erwin started at ATBS in March 2001. He began his career at ATBS as a Business Consultant and was soon promoted to Group Lead working with the Fastruck Program. Mr. Erwin was the Manager of the Business Consulting group until September 2012. He is now the manager of the Tax Department. Prior to ATBS, Mr. Erwin worked in the Financial Services industry. Mr. Erwin has a Bachelor of Science Degree in Business Administration and Finance from Colorado State University.

View Full Bio and All Posts by Andrew Erwin