Things to know before moving forward with the Affordable Care Act :: Wamhoff Financial & Accounting

Things to know before moving forward with the Affordable Care Act

Although it was passed over five years ago, there have been many revisions and much confusion surrounding the Affordable Care Act. Sandy Furuya, Senior Accounting Manager at Wamhoff Financial Planning and Accounting Services, discusses some of the recent developments with the ACA.

  1. The Individual Shared Responsibility Provision Requires One of the Following:
    • Have qualifying health coverage called minimum essential coverage.
    • Qualify for a health coverage exemption
    • Make a shared responsibility payment when you file your federal income tax
  2. Minimum Essential Coverage is Required, and Includes
    • Most health insurance provided by your employer.
    • Health insurance purchased through the Health Insurance Marketplace in your area (you may qualify for financial assistance)
    • Government sponsored programs including Medicare, Medicaid, and veterans’ coverage
    • Health insurance purchased directly from an insurance company
    • Other health insurance programs recognized by the Department of Health & Human Services
  3. Shared Responsibility Payments
    • The Individual Shared Responsibility Payment began in 2014, and is the fee or penalty you pay for not having health insurance coverage.
    • For any month during the year that you or any of your dependents do not have minimum essential coverage and don’t qualify for coverage exemption, you will be required to make an individual shared responsibility payment with your tax return.
    • In general, the annual payment amount is greater of a percentage of your household income or a flat dollar amount, but is capped at the national average premium for a bronze level health plan available through the Marketplace.
  4. Advance Payments of Premium Tax Credit (PTC)
    • Those who received advance payments of the PTC in 2014, and who have not filed their 2014 tax return must do so as soon as possible.
    • Failure to file a 2014 tax return will result in the taxpayer being ineligible to receive advance payments of the PTC in 2016
    • Individuals who are not eligible for advance payment of the PTC will be responsible for the full cost of monthly premiums and all covered services.
    • Nonfilers may also need to pay back some of all of their 2014 advance payments.
  5. New Forms for the Next Filing Season
    • New forms will be implemented that you will need to complete in order to file your tax returns for the 2015 filing year.
    • These forms will show the IRS that you have minimum essential coverage for 2015.
    • Form 1095B reports information for individuals who are covered under an employer’s plan, and the number of months the individual had at least one day of coverage.
    • Form 1095C is a statement issued by larger employers to employees providing coverage information by month for the employee and their dependents.
    • 1095A is required for those who have obtained insurance through the SHOP Marketplace.