Health Care Reform – Things to Know for 2014
Published:
By Larry Greenwalt, CPA, Chairman of the Board and Marie Jett, CPA, Manager, Tax Services Group
Problems with the health care exchange, a delay in the effective date of certain provisions, and a myriad of rules have contributed to confusion about individual and organization responsibilities for having/providing health insurance.
INDIVIDUALS
Effective January 1, 2014, substantially all Americans will have one of three options for meeting the health insurance mandate:
1. Obtain coverage through their Employer if it is available.
2. Purchase insurance through the Individual Market Exchange or through an off-exchange market.
3. Be uninsured and pay a penalty (initially the penalty is the greater of $95 or one percent of taxable income for adults and 50 percent of the flat fee for children less than 18.)
If insurance is purchased through a Federally Facilitated Marketplace/Exchange, certain individuals may be eligible for a subsidy unless–
1. Employer coverage is available and it does not cost more than 9.5% of W-2 earnings (single coverage) and Employer coverage meets at least 60 percent of the minimum value requirement.
2. The individual’s income is above 400% of the Federal Poverty Level.
EMPLOYERS
Employers with more than 50 full time equivalent employees must provide health insurance coverage beginning January 1, 2015. There are a couple of penalties that come into play for these employers:
1. If the Employer does not offer health insurance to 95% of the full time employees, the penalty is $2,000 per employee (the first 30 employees are excluded in calculating this penalty).
2. If the Employer offers coverage that is deemed unaffordable – i.e. Can’t cost more than 9.5% of the employee’s W-2 for single coverage. It must also meet a 60 percent minimum value requirement. The penalty is $3,000 for each employee that receives a tax subsidy from a public exchange.
There is continuing pressure in Congress to delay or eliminate some or all of the provisions of the Affordable Care Act, but these rules are in place now. We will try to keep you informed of major changes as they occur. Please give us a call if we can be of assistance to you.
Contact
Larry Greenwalt, CPA | Chairman of the Board | 317-240-4489 | lgreenwalt@greenwaltcpas.com
Marie Jett, CPA | Manager, Tax Services Group | 317-260-4475 | mjett@greenwaltcpas.com