Affordable Care Act Tax Provisions
Although ObamaCare (Patient Protection and Affordable Care Act) was signed into law on March 23, 2010, many Americans still find themselves struggling to understand it over five years later. Some implications are very visible, such as the mandatory rule requiring chain restaurants to display calories.
In this post, we’ll take a look at the many financial and tax provisions associated with the Affordable Care Act.
Some implications are not so obvious, such as the fact that all new insurance plans must provide free preventative care, close the Part D Medicare Coverage Gap, and raise the threshold from 7.5% to 10% at which medical expenses can be deducted as a percentage of total income.
You may have noticed private health insurance plans started facing new taxes under ObamaCare in 2012, which were likely passed onto the consumer. What are a few other implications?
- Insurance companies cannot deny coverage based on health status
- Insurance companies are required to cover people with pre-existing conditions
- Individuals have the right to appeal insurance companies’ decisions
- Insurers must provide explanations for increases in rates and break down where their money is spent
- All plans sold after 2014 must include 10 Essential Benefits:
- Outpatient care
- Inpatient care
- Emergency room visits
- Maternity/newborn services (including free birth control)
- Mental health services and addictive treatment
- Prescription drugs
- Rehabilitation services and devices
- Lab services
- Preventive services
- Pediatric services (dental and vision included)
Who is Impacted by ObamaCare?
The short answer: every person who is a citizen of the United States. While family members under the age of 26 may receive coverage through a parent’s insurance plan, that is only applicable if the parent has insurance. It sounds simple, but as more and more employers struggle with rising coverage rates, this is becoming a problem for many employees.
Not having coverage results in a financial penalty. For example, you have until February 15th to qualify for March 1st coverage. If you don’t have insurance, you’ve already missed three months and owe the penalty. If you miss the February 15th deadline, you can’t get signed up for coverage until June 1st.
How are Employers Affected by ObamaCare?
Beginning in 2015, employers are required to offer health insurance if they employ 50-plus full-time equivalent employees. The changes in coverage rates are impacting many employers. Some employers are dropping coverage because they simply can’t afford it, which forces employees to try to find coverage through the federal marketplace or go without insurance and pay a penalty. This process can become quite stressful.
Talk to an Expert
Still trying to wrap your head around how the Affordable Care Act tax provisions will impact you and your family? Talk to the tax experts at Baker Retirement & Wealth Management, P.C. We’ve been serving the greater Evansville area for nearly thirty years. Our team is trained to understand how ObamaCare impacts you.
To get answers to your questions about the Affordable Care Act, call us today at 1-866-244-3517.Talk to a CPA for Free