During the past few years, there have been a lot of questions about the new healthcare act. Many people who were not able to qualify for insurance before because of their pre-existing health issues are now able to get the coverage that they need while others who just couldn’t afford the insurance are able to make the payments. The health insurance is required for most citizens in this country, and failure to have the right amount of insurance, or any insurance at all, can be severely penalized during tax time.
Understanding the new health insurance requirements can be confusing. Many taxpayers have no idea how much health insurance they need to have or if they have enough to avoid the penalties. If you have any questions about your current insurance or if you are curious whether or not a new plan will work for you, make sure to contact the professionals at M-E Accounting and Tax Services to help you out. Let’s learn a bit more about this new health insurance requirement and how it can apply to you.
Minimum Coverage You Must Have
No matter what plan you pick with your insurance, there is some minimum coverage expected. Your health insurance must cover at least the minimum 10 essential services including:
If your insurance doesn’t cover some of these, it is not going to qualify as the minimum of health insurance. Purchasing through the marketplace as well as through your employer sponsored program, or Medicaid if allowed, will ensure you are getting all these areas covered. If your children are on the CHIP program in your state, they are covered under these ten services as well. If you are unsure about whether your insurance covers all of these essential services, come and visit us at M-E Accounting and Tax Services. We can take a look at your insurance and determine if it covers everything that you need.
The Different Plans to Try
There are a few different insurance plans that you can pick from. First, if your employer offers insurance it is usually easiest to go with this option. But if you go through the marketplace, you will be able to pick between bronze, silver, gold, and platinum. Here is some information about each kind to help you make the right decision:
Bronze and silver—these are going to have the lowest premium, but you are going to pay more out of pocket for your prescriptions and doctor visits. These plans will also pay between 60 and 70 percent of all medical costs you incur.
Gold and platinum—these are going to have monthly premiums that are a bit higher, but the co-pays will be less and the plan will pay between 80 and 90 percent of the medical costs.
You can choose from these plans based on your income and how much insurance you think you need for the year. You are not able to be turned down because you have an existing medical condition, which is one reason that a lot of people can now get insurance than couldn’t before. In addition, your coverage for all pre-existing conditions is set to start right away. If you need help picking the right insurance for your health, make sure to contact the professionals at M-E Accounting and Tax Services to get started.
Who Doesn’t Need Insurance?
There are a few people who aren’t required to have this new health coverage. Some of the groups who don’t need to have this insurance include those who didn’t have to file an income tax return because they were low income, those who have religious objections to the health insurance, American Indian tribes recognized by the government, undocumented immigrants, and prison inmates. All other groups will be required to have health insurance for the tax year. If you are unsure about whether you fall into one of these groups, make sure to contact our professionals at M-E Accounting and Tax Services to take care of this issue for you.
The Cost of Not Having Insurance
Since having medical insurance is a requirement, there are some penalties for those who choose to not have the right insurance. The penalty is going to change each year. For example, in 2014, the penalty was $95 per adult without insurance and $47.50 per child with the maximum for the year coming out to $285. In 2015, this was increased to the higher of either $325 per adult or 2 percent of your annual income. Then in 2016, this amount will be either $695 for each adult or 2.5 percent of your income with a maximum of $2,085 for each family. After this point, the penalty is going to go up based on inflation.
The amount of the penalty that you will pay also depends on how many days in the year you go without insurance. For example, if you lose your job and health insurance and you don’t purchase insurance from another location for the rest of the year, you will be prorated on the penalty based on how long you have the insurance.
To find out more about your requirements to have health insurance and how high your penalties can be for forgoing this requirement, make sure to contact Motaz Elkhouly at M-E Accounting and Tax Services, Inc. in Cape Canaveral, FL.
M-E Accounting & Tax Services, Inc.