The Affordable Care Act and Tax Penalties
What is the Affordable Care Act?
The Affordable Care Act (ACA) is the biggest healthcare law passed since Medicare and Medicaid in 1955. Best known as “Obamacare,” this new system is designed to give every United States (US) citizen the opportunity to receive healthcare insurance. Before then, many citizens were uninsured. Hospitals and other healthcare agencies were able to refuse medical treatment from anyone who did not have health insurance. As a result, many were sentence to certain illnesses and diagnosis that may have been avoided.
Today, Obamacare has seen to it that universal healthcare is dispersed throughout the country. The overall goal of The Affordable Care Act is to improve the quality of life that will ultimately save businesses and individuals more money. In theory, individuals will have a healthier lifestyle that will enable them to work more and businesses won’t have to pay out so much money for employees who are out on sick leave thinking that healthier employees might cost less!
Health Insurance. It’s the Law!
Much like auto insurance, there is a price to pay if one does not have healthcare. It’s a stipulation that is required in order to legally drive and is not really brought to light for penalties until unfortunately, an accident happens. Although the same concept of paying a price for lack of coverage applies, theway taxpayers pay penalties are a bit different.
Consequences of Not Having Health Coverage
It is required by law that every US citizen has some sort of healthcare coverage. If one does not have health insurance, then they must pay a fine. The amount depends on certain factors such as household income and the size of the family. The calculation is somewhat similar to filing annual income taxes. The gross income is subtracted by tax-exempt interest as well as other exemptions that result in one’s net income.
Taxpayers must pay a fee for every month that they, their spouse, or tax dependents don’t have health insurance that qualifies under the minimum essential coverage (MEC). According to HealthCare.gov, the MEC is “any insurance that meets the Affordable Care Act requirement for having health coverage. If you have MEC, you don’t have to pay the fee for being uninsured. Examples include: Health Insurance Marketplace plans; most individual plans bought outside the Marketplace; job-based insurance, including SHOP plans; Medicare; Medicaid; CHIP; TRICARE; COBRA, and certain other coverage.”
Finding the Right Kind of Tax Assistance
Some may agree that the ACA is a great thing. Others may disagree. The fact of the matter is ACA is here to stay and those who don’t comply with it will have to pay a tax penalty. To find out how you can avoid paying any healthcare tax penalties,contact Success Tax Relief. We have over 30 years of experience communicating with the Internal Revenue Service. To learn about other services we offer, visit our services webpage here. If you’d like to schedule a consultation with us, contact us online or call us today at 877-825-1179.