Affordable Care Act (ACA) AKA Obama Care

The penalty for failure to maintain minimum essential coverage for individuals in 2015 will be the greater of $325 or 2 percent of income. This is a 300% jump from the 2014 penalty of $95, or 1 percent of income. For families, the penalty is the greater of $975 or 2 percent of income. This compares to the $285 in 2014. The rationale for the steep penalty increases over 2014 levels is that the law was new last year and lots of people did not understand it. No such luck in 2015, and next year in 2016 the penalty doubles again.

Three Tax Considerations during Marketplace Open Enrollment

Here are three things you should consider during the Health Insurance Marketplace Open Enrollment period:

1. Advance credit payments lower premiums - You can choose to have all, some, or none of your estimated credit paid in advance directly to your insurance company on your behalf to lower what you pay out-of-pocket for your monthly premiums. These payments are called advance payments of the premium tax credit or advance credit payments. If you do not get advance credit payments, you will be responsible for paying the full monthly premium.

2. A tax return may be required -If you received the benefit of advance credit payments, you must file a tax return to reconcile the amount of advance credit payments made on your behalf with the amount of your actual premium tax credit. You must file an income tax return for this purpose even if you are otherwise not required to file a return.

3. Credit can be claimed at tax time - If you choose not to get advance credit payments, or get less than the full amount in advance, you can claim the full benefit of the premium tax credit that you are allowed when you file your tax return. This will increase your refund or lower the amount of tax that you would otherwise owe.

Open enrollment for coverage through the Health Insurance Marketplace

The open enrollment period to purchase health insurance coverage for 2016 through the Health Insurance Marketplace runs from November 1st, 2015, through January 31st 2015. Enroll by December 15th 2015 to have coverage effective January 1st 2016

Household Income & Eligibility for Subsidies

The main purpose of the Affordable Care Act is to ensure that health insurance is available to everyone. If your income is less than the lowest number listed in a given range, then that means you are eligible for Medicare/Medicaid at little to no cost.

The amount of the subsidy is based on your household income and the number of people in your household. Known as the "Advance Premium Tax Credit" in technical terms, subsidizes can be applied monthly towards the rate of your plan or as a lump sum credit on your tax return at the end of the year.

If number of People in your Household is: 1 you household Income range should be: ($11,670 to $46,680).

If number of People in your Household is: 2 you household Income range should be: ($15,730 to $62,920).

If number of People in your Household is: 3 you household Income range should be: ($19,790 to $79,160).

If number of People in your Household is: 4 you household Income range should be: ($23,850 to $95,400).

If number of People in your Household is: 5 you household Income range should be: ($27,910 to $111,640).

If number of People in your Household is: 6 you household Income range should be: ($31,970 to $127,880).

If number of People in your Household is: 7 you household Income range should be: ($36,040 to $144,120).

If number of People in your Household is: 8 you household Income range should be: ($40,090 to $160,360).

If you need any more information regarding the above topic, contact me at 630-663-1500.