Obamacare – Unconstitutional!!! You shouldn’t be forced to purchase something you don’t want! I’ve heard and seen these statements over and over and over and over again. First let me clear up a few things before I go into what I really wanted to share with you about the Affordable Care Act – specifically the individual shared responsibility provision. Ok here it goes … First “Obamacare” is NOT I repeat is not a health care plan. Obamacare aka The Patient Protection and Affordable Care Act (PPACA), and commonly called the Affordable Care Act (ACA) is a United States federal statute signed into law by President Barack Obama on March 23, 2010. It represents the most significant regulatory overhaul of the U.S. healthcare system since the passage of Medicare and Medicaid in 1965.
The ACA was enacted with the goals of increasing the quality and affordability of health insurance, lowering the uninsured rate by expanding public and private insurance coverage, and reducing the costs of healthcare for individuals and the government. It brought about mandates, subsidies, and Insurance exchanges which were intended to increase coverage and affordability. The law also has required insurance companies to cover all applicants within new minimum standards and offer the same rates regardless of pre-existing conditions or sex. The United States Supreme Court upheld the constitutionality of the ACA’s individual mandate as an exercise of Congress’s taxing power on June 28, 2012.
Love It or Hate It – It does not matter because it is a law and with any law comes consequences if you do not abide by them. My purpose today is not to debate whether you should love it or hate it my purposes today is to educate you on the individual shared responsibility provision of the ACA and give you the resources to get through this process since 2014 tax year is when individuals were/are required to have qualifying health care coverage (called minimum essential coverage), qualify for an exemption, or make an individual shared responsibility payment, or SRP (penalty), with your Federal income tax returns.
If you’re required to have coverage, you’ll be charged a tax penalty by the government if you go without insurance for 3 consecutive months or longer. You won’t be charged the tax penalty if you are uninsured for less than 3 consecutive months. The penalty is $95/per adult and $47.50/per child for the first year or 1% of your AGI, whichever is greater (Maximum is up to $285 per family). If your household income is above 400% of the federal poverty level then you may be exempt from paying the penalty or if insurance in your area cost more than 8% of your taxable income (taking into account employer contributions or tax credits). These amounts above are for the 2014 tax year. On the chart below you will see how the penalties will go up in future years.
See that was simple and painless. I promised you some resources and you can definitely get them at www.dmtbookkeeping.com and click on the “Get Started” posted note or click on the one below and there you will find the calculators, exemptions forms and much more.