Seven Things You Need to Know About Health Care Reform

Are you starting to hear the buzz about Health Care Reform, also known as  “Obamacare”?  Are you confused about how it impacts you and your family?

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You can relax.  Whether you’re insured or not, here are seven important things you need to know:

  1. Health Care Reform Provides Affordable Insurance to the Uninsured
  • Beginning October 1, 2013, uninsured Americans can start shopping for affordable health insurance in the online health insurance marketplace.
  • Most uninsured U.S. citizens and legal residents will be required to purchase health insurance by March 31, 2014.

2.  Health Care Reform Provides Expanded Coverage

  • Ability for young adults to stay on parents’ plan until age 26.
  • Individuals with pre-existing conditions cannot be denied coverage..
  • Medicaid will now be offered to individuals under age 65 with income less than about $15,302 ($31,155 for a family of four).

3.  You May Be Eligible for a Government Subsidy

  • Uninsured individuals who purchase health insurance through an online health insurance marketplace or exchange and have income no greater than about $94,200 * for a family of four, may be eligible for a government subsidy to help pay for health insurance.
  •  The subsidy will be in the form of a tax credit.
  • Unlike most tax credits, you will not have to wait to receive the credit or subsidy; it will be applied to your insurance premium when you purchase in 2014.

4.  You Can Start Checking Insurance Options Before 2014

  • Beginning in October 2013, if you’re uninsured or looking for more affordable insurance, you can visit your state’s online health insurance marketplace to see your options.

5.  You May Receive a Penalty if Not Insured by March 31, 2014

  • If you are required to purchase health insurance and have not done so by March 31, 2014, you will receive a penalty.
  • The tax penalty will be on your 2014 tax return filed in 2015.
  • The penalty in 2014 is $95 per adult, $47.50 per child, capped at $285 or 1 percent of household income depending on income.
  • Each year the penalty increases.
  • By 2016, it rises to $695 per adult, $347.50 per child, capped at $2085 or 2.5 percent of household income.
  • There is no penalty for a gap in coverage less than three months.

6.  You May Be Exempt from the Health Care Reform Law

You may not be required to purchase insurance and will not see any changes in 2015 on your 2014 tax return with regard to the purchase of insurance if:

  • You already have health insurance through your employer, Medicare, Medicaid, or purchased on your own.
  • You have income below the IRS tax filing threshold ($9,750 if you are single).
  • You have financial hardship.
  • The lowest cost plan option exceeds 8% of  your income.
  • You are American Indian.

7.  TurboTax is Your Reliable Health Care Source

  • As with all tax laws, TurboTax is up to date with the latest health care tax law changes. You can continue to rely on the TurboTax Community for answers to help you find out how health care reform impacts you, your finances and your taxes.

*400% of the 2013 Federal Poverty Level

TurboTaxLisa

Lisa Lewis is a CPA and the TurboTax Blog Editor. Lisa has 15 years of experience in tax preparation. Her success is attributed to being able to interpret tax laws and help clients better understand them. Lisa also has been a TurboTax product user for many years and understands how the software program works. In addition to extensive tax experience, Lisa also has a very well-rounded professional background. She has held positions as a public auditor, controller, and operations manager. Prior to becoming the TurboTax Blog Editor, she was a Technical Writer for the TurboTax Consumer Group and worked on a project to write new FAQs to help customers better understand tax laws. She could also be seen helping TurboTax customers with tax questions during Lifeline. For Lisa, getting timely and accurate information out to customers to help them is paramount.

Comments (98) Leave your comment

  1. This article neglected to list other types of peopel who are exempt from having to have medical insurance, under Omaba Care law.

  2. You are kidding us, right? This whole thing is a disaster and affordable is not something that describes it. Time to take this down and put an “under construction” sign up until this all fleshes out.

  3. I”M A SINGLE WOMEN THAT NEED THE OBAMA CARE FOR MYSELF BECAUSE I DONRT HAVE NO INCOME COMING IN NOTHING BUT FOOD STAMP IT SO HARD FOR ME TO GO TO THE DOCTOR ON A REGULAR BASCIS BECAUSE I CANT EFFORD TO PAY $400.00 TO $600.00 DOLLAR EVERY TIME I GO TO THE DOCTOR SO THAT REASON WHY I NEED SOME CARE FROM SOMEONE US BESIDE ME

  4. I THINK IN NEED SOME TPY OF MEDICAL SO I CAN BE ABLE TO GO TO THE DOCTOR ASAP LIKE A LOT OF US OUT HERE NEED THE SAME THING SO I NOT JUST TALKING ABOUT MYSELF WHEN I SPEAKER I SPEAK FOR US ALL. I AM A SINGLE WOMEN, DONT HAVE NO INCOME COMING IN, I NEED TO GO TO APPOINTMENT THAT I CANT MAKE BECAUSE THEY ARE ASKING FOR $400.00 TO $600.00 WHEN I WALKING IN THE DOOR, NOT ADD THE PART WHEN U GET IN THE VBACK OFTEN SEND THE DOCTOR. THEY WHY I NEED SOME MAJOR HELP, CAN U PLEASE HELP ME BE ABLE TO GO TO THE DOCTOR TO CHECK ON MY HEALTH, WITH SEVERN PROBLEMS THAT I AM HAVE TO DEAL WITH RIGHT KNOW. THANKS

  5. I need to enrool un The programa Obama care
    I dont hacve insurent and my health condición need atención
    I have cancer ;Lupus; diabetes; hig blood presión.
    Please i need tour help .for better c uality of life.
    Thak y o u.God blees.

  6. What is the basis of income under the Affordable Health Care, adjusted gross or net taxable income, line 37 or line 43 on the 1040?

    Thanks,.

    Robert

  7. Which income tax return will the IRS be looking at in determining the first penalty, the 2012 or 2013 tax return? I would guess the 2013 return if the penalty appears on the 2014 tax return.

    • Hi Steve,
      They will actually look at your 2012 tax return filed in 2013, because 2013 tax returns will not be filed until 2014. The penalty will appear on your 2014 taxes filed in 2015.
      For more answers to your specific health care questions, visit http://www.TurboTaxAnswerXchange.com
      Thank you,
      Lisa Greene-Lewis

      • Actually I found the answer to my question on the Turbo Tax AnswerXchange. I wanted to know what tax year the IRS would look at in determining the first fine and that would be the 2014 tax year not 2012.
        For tax year 2014, the tax penalty for not having health insurance is the larger of 1% of your 2014 income or $95 per uninsured adult (plus $47.50 for each uninsured child), with a maximum penalty of $285 per family.

        For tax year 2014, the tax penalty for not having health insurance is the larger of 1% of your 2014 income or $95 per uninsured adult (plus $47.50 for each uninsured child), with a maximum penalty of $285 per family.

  8. All, I lived in France for 13 years. Everyone from America said, “Oh health insurance is free, right?” Well, not right. I had a health card, and no issues with getting health care when I needed it. I made a very small salary $25,000 per year..and $12,000 in taxes. THIS is socialism. The ACA is NOT socialism. What it is…is just like the tax you pay to get MEDICARE, and SOCIAL SECURITY. It is learning to take responsibility for your health and future.

  9. mi nombre marlene cera quiero acogerme al Obama care necesito saber si existe una planilla o form para hacer la solicitud y si me la pueden mandar o confeccionarse via internet

  10. Dear TurboTax,can you tell us how the ACA subsidy origininates ,and if it is permanently built into the matrix?

  11. I have heard that in 2014 there will be taxes on my employee “benefit package.” Mine is worth about $36,000. It counts vacation, sick time and insurance benefits and puts a monetary value on these. Actually my benefit package is almost as much as I make a year. The thought of paying taxes on this is scary and if it is true, I need to start planning and change my withholding. Can you give insight on this?

    • There is no current plan to tax your benefit package. Starting in 2018, employees with premium health care plans may be taxed on a portion of the health insurance premium, but not on dental, vision, life or disability insurance, or on other benefits.
      For additional answers to your specific health insurance questions, please visit
      http://www.TurboTaxAnswerXchange.com

      Thank you,
      Mary Ellen

  12. Will turbo Tax -Deluxe for 2013 tax season be
    compatible with MAC OS X 8.5. I purchased Turbo Tax last year (thru the Advantage Club and had trouble with the Program. I had to buy a copy of Turbo Tax (Deluxe) at Best Buy.

  13. If you all don’t like what is going on in this country then step up to the plate and run for office yourselves.
    What about those of us who don’t or can’t work, and don’t file because of no income to file for?

  14. If I purchase insurance through the exchange and become eligible later through an employer at a better rate, can I change back to employer coverage?

  15. As a retired educator, it always amazes me how really ignorant some of our citizens are. Why can’t individuals just stop being so gullible. Why not do some research and become informed before speaking. Of course, that might require that you do a little reading and that would be too difficult, right? Thank you Turbo Tax for this very important information.

  16. If you like socialism, then you will like Obamacare, no matter how it is dressed up. From each according to their ability, to each according to their need (Karl Marx). Socialism works until it runs out of other peoples money (Thatcher) Venezuela and Detroit all have socialist economies. Venezuelans can no longer get toilet paper, but at least everyone is the same lowest common denominator. “If it sounds too good to be true, it is too good to be true ” ( your grandmother)…but what does she know.

    • Not true the ACA (Afforable Care Act) is a market based solution to health care if you are going to attack it at the very least do your homework

    • In socialism the govt. has complete control there is more market forces to determine what the prices will or won’t be .It is in the best interest of evey citizen to embrace this market based solution. It is only fitting that this nation which has led the world in free market solution to problems should come up with the ACA

      • Rene: I see your point ,however the Administration controls the price of care by regulating the provider service and subsidizing the cost recipients pay. iIs this your understanding of a free market?

    • John said: Mike, if you dislike Socialism, then don’t apply for Social Security when your time comes, and refuse to take Medicare — two Socialistic programs…But where would we be, and you, without them?? Perhaps you have an answer for this: Of what use is government if not for the good of its people? Your taxes pay for the little you receive back for them…

  17. My son is a type 1 diabetic. Which is considered a “pre-existing condition”, and “should” automatically qualify, under the “Govt’s PRE-existing plan”?!?
    Yet, the USGov website clearly states that there’s a new applicant “FREEZE”, which has been in effect since 02/2013!!! If this “gov’t healthcare reform”, is placing its “stance” on protecting those w/ “pre-existing conditions”, then why aren’t those “public-perceived” benefits available?!!

  18. Mr. Peters I can not agree with you more.this country has gone to hell thanks to our Presidents and congress and the house. this is not a fee country anymore. they may as well throw the constitution out the window. they are not worth the money it would take to blow them all to hell and back.

  19. Thank you for the information. I used to stay informed , but our government gave me more stress than employees and customers ever could and had to step away from following since it gets sooo blown up on the radio shows . Im glad to have received this and the fact turbo tax put it up for me to see sooner than last minute gives me a chance to prepare. The fact that we pay sooo much in taxes and employer tax and all the taxes everywhere i turn, i dont see how were going to make it since sales are slowing down and now we have to prepare to buy what i dont beleive in. I do not at all like modern medicine . Everytime you go to the hospital your health is depending on those individuals to come to work , be focused and not screw up…..well good luck with that because a pa mistake put me in ICU for a month when i went in for simple treatment. But now im forced to pay for incompetence. Thanks again turbo tax for the post since i have yet to see anything on the news..ad..anywhere else. Must be nice being a president or politition with a fat guaranteed salary and not having to stress out this now.

  20. Does the penalty apply to a one time fee or a monthly fee? I read the information provided to our company and I interpreted the fees are monthly fees so the actual penalty if you failed to have insurance for a 12 month period would be the $95 @ 12mos = $1140 penalty for 2014 . I hope I am wrong!

    • Hi Molly,
      The penalty is per person for the year, the higher of $95 or 1% of your adjusted gross income. The penalty rate goes up to 2% for 205 and 2.5% for 2016, with the minimum increasing accordingly. Penalties for children without insurance are half the amount as for adults.
      For additional answers to your specific health insurance questions, please visit
      http://www.TurboTaxAnswerXchange.com

      Thank you,
      Mary Ellen

  21. It appears my previous post was deleted.

    Obamacare in fact, will not perform as you state. “Health Care Reform Provides Affordable Insurance to the Uninsured”

    Obamacare will in fact increase costs across the board for all Americans, especially the hard working ones. The only true beneficiaries are welfare for life recipients. Even these will suffer eventually.

    • I agree, the information is very biased. Who do you think is going to pay for all this health care. Should the goverment be telling us what coverage we need. Most people signing up are signing for Medicaid. this is a mess.

  22. Lisa, Thank you for the article, and to the rest of you that think this is a political statement, get a life. These are facts, not opinions, what you are expressing are opinions. Good summary.

  23. I am disappointed in your implied endorsement of ACA Obama health. You have made the bottom of list of acceptable tax and accounting service.

    You are aiding the theft of Money and Free Choice
    Fred Lake

    • TurboTax is not endorsing ObamaCare. They are letting you know what to expect as far as filing your taxes. Get informed and stop watching Fox News. You tea party republicans make the rest of us conservatives look bad.

      • Lauren….you’re making a lot of assumptions. Surprised you didn’t include the Koch Brothers in your rant.

        Intuit/Turbo Tax is the best Tax figurer, but I may got to the rival one this year.

  24. I have seen nothing about the 11 million illegal residents being required to purchase obamacare. Do you just automatically put them on Medicaid or what?

  25. Where are you people getting that Turbo Tax is taking a stand? They are simply informing us of the tax that has already been passed. They are giving us the 411 we all need to know for 2014. There is nothing political in the information..pro or con….just the facts of something that I’m sure there will be many questions about.

  26. AMAZING! Another “advertisement” for the disastrous healthcare mess our government has forced on us. You make it sound so nice Turbo Tax. You fail to mention how the cost of using my present employer’s insurance is being driven up so much that they are going to have to drop the benefit for everyone in the company. There hasn’t been and won’t be a choice in this. Already I had to drop my wife from my better insurance plan because she was eligible through her employer. Now we both pay a premium for two policies only she doesn’t have the coverage I have. By design,over time, obama’s plan is forcing everyone to his methods. Wake up America, stand up for yourself and pay attention, little by little your freedoms are being stolen. Obamacare is NOT the answer. Turbo tax? You make it sound so easy, just like our broken government. Another wolf in sheeps clothing.

  27. so why would anyone listen to tea party politicians about healthcare. they are surely not experts and only say stuff to advance their own career and agenda.

  28. I am suprise by the reaction of others on this article. This is just inforamtion. I am glad TURBO TAX did it. Now I know by october I can compare what I am paying now for healthCare and wether the Offortable Health Care is offortable.

  29. Thanks for the information without all of the hype and opinions on this subject. Keep it up and I’ll keep using your product.

  30. You forgot to list one key fact: how much this new law costs. It benefits a few Democratic party supporters in the short run; but hurts others with the absence of jobs that would otherwise be created. But the worst part is it accelerates our country going bankrupt; likely to have to be handled by our children and grandchildren. Shouldn’t the cost be included on your list?

  31. Thank you TurboTax for simplifying this and laying out the FACTS.

    To all of you ignorant people who have posted negatively on this article, maybe you should take another look. NO WHERE in this article does it state that TurboTax endorses ObamaCare, they are just simply running things down for people to understand and be better informed, however if any of you had paid attention to the presidential debates and were informed citizens you would have known this was coming and maybe would not have voted for him and would not have this to complain about.

  32. This is not a political discussion.Lisa Lewis simply states how the ACA affects our tax situations,and quite frankly our lifestyles.Kudos to TurboTax for the insight and the research.thank you TT

  33. For once I am getting accurate information about the new health care laws. Thank you Turbo Tax.

  34. You can relax – Obama and Intuit said health insurance will be affordable. For instance, the New Jersey BC/BS “Basic and Essentials” plan I pay $1,026/month (for self, wife, child) won’t meet the Obamacare regs, so I will need to replace it with an approved plan that only costs three to four times as much per month. This according to that bastion of conservative Tea Party right wingers, the reporters of the New Jersey Star Ledger.

    Of course, if I meet the income limits I can get a tax subsidy, meaning that some other taxpayer gets to pick up the tab for me. But that’s ok, because instead of getting the plan I want and can afford, I can get the plan Obama wants me to have and that he can make someone else help pay. My other option is to drop insurance altogether and pay the fine, and get someone else to pick up the tab when I get sick or injured. And that’s fair, right?

    But relax, it’s ok. The government and someone with “a very well-rounded professional background” said everything will be fine.

  35. As a US Army Veteran I have coverage at the VA medical facility. Will I be required to purchase additional coverage?

  36. Heads Up people! After reading the comments, I went back and reread the article. I fail to see any political bias here. Regardless of whether you are a fan or an opponent of “Obamacare” it is really important to understand how this new law impacts YOUR taxes. After that, it’s up to you to prepare to comply with the law. Meanwhile, go ahead and follow your heart on what YOU need to DO politically.
    Thanks, Turbo Tax.
    Bruce

  37. Thanks for the information about Obamacare. It can be tough to get a clear picture about this healthcare reform law because of all the rhetoric from both sides of the debate.You have given a useful and easy to understand breakdown of what we need to know. I like how you just gave to facts.I’ve been a loyal customer for a few years now and will continue to use you guys for my tax preparation.

  38. As an American Indian married to non Indian wife who has no income will we benefit in any way by filing seperatly making her eligable for substance aide. Thanks

  39. Thank you for presenting the factual basics of this law. People need these facts rather than listening to the TV/radio “spin.” I appreciate the non-biased presentation. I am more likely to continue with TurboTax because of this information.

    • Your liberal bias is providing incorrect information.

      Obamacare does not actually Provide Affordable Insurance to the Uninsured. Obamacare does increase costs across the board for all working Americans. Many of those welfare for life recipients are going to be much healthier now.

  40. Did I miss reading something in this article? I failed to read that Turbo Tax supports/agrees nor does not agree/support the Obama Administration. I interpreted this article as an informational one updating its customers on what to expect per new tax law.

    • Hi Lisa,
      You are correct. We are stating the facts regarding the law that already passed so you know how it impacts you and your taxes.
      Thank you,
      Lisa Greene-Lewis

      • Lisa, I was a little shocked to read this email. In line 1 you are clearly supporting Obamacare by stating it provides “Affordable insurance to the uninsured” that is simply not true as the uninformed will soon find out.

      • Mom son is a Veteran and receives his medical care through the VA. Does this count? and how do you report it on your income tax?

      • Hi Kathy,
        Your son’s medical care received through the VA is not reported on his tax return. Only individuals who purchase their insurance through the Health Insurance Marketplace and receive a tax credit or those who are required to purchase health insurance and do not by 3/31/14 will have tax implications related to the purchase of health care on their 2014 taxes filed in 2015.
        Thank you,
        Lisa Greene-Lewis

      • You are gorgeous Turbo Tax Lady, Keep my refund and spend my lottery winnings $40,000 for a date and you pick the restaurant?

    • Read line 1 again, and again and again until you understand it. It DOES NOT provide AFFORDABLE health insurance to the uninsured.

  41. Thank you TurboTax for concisely presenting the effect of Obama Care on my taxes.

    Asfor the political dribbles what we want does not change waht we get and a rationale person need to consider reality not fantasy.

  42. Nice job Turbo Tax, explaining the facts of this law in simple understandable terms.

    It’s beyond me how many people can be so ignorant or actively dispute FACTS.

    Again, nice job Turbo Tax.
    .

  43. Thank you for a very well written, concise, article that educates! I am looking forward to having affordable healthcare coverage.

  44. Thank you TurboTax for making that clear, don’t get me wrong, it enrages me but we all need to know what to expect. It’s preposterous, it should be our right as an American citizen to choose whether we want our own body insured. I can understand the government implementing, or enforcing, a law that says parents must provide health insurance for their children (minors), but the parent should have the right to choose whether or not they want themselves insured. We are not free in America anymore, we are just more free than most other countries. At least we still have freedom of religion. Therefore, since I am a devout, born-again Christian, I can tolerate this type of idiocracy of our democracy by praying for the ability to “understand?”.

  45. Wow am I out of the loop!! Until receiving this I had never even heard about any of this!! Thank you, Turbo Tax!!!

  46. Being in the healthcare profession for almost 40 years, I find it almost funny that a company that specializes in income tax is an expert on where healthcare is going. Sadly, I thought Turbo Tax was a private corporation, but this is our government at work, just like AARP. I have to wonder how much more they will take from us and hate what we are leaving to future generations of this once wonderful country.

  47. I loved Turbo Tax, it was easy and there were plenty of ansewers to my questions.BUT this last year I couldnt use it because suddenly my system/browser wasnt good enough. I wasnt going to buy a new computer just to do my taxes. That was the end my relationship with Turbo tax

    • Hi Heather,
      You can still use TurboTax and you don’t need to purchase a new computer. You can update your browser using online instructions.
      Thank you,
      Lisa

  48. Because the Supreme Court ruled this to be a tax, it should all be deductible. Unfortunately, with the government involved it will cost more, be poorly managed and create just another major drain on our already bankrupt economy. Thanks to all the uninformed people who have allowed this to happen!

  49. I will no longer use TurboTax products. Turbo Tax has chosen to endorse a political agenda and I will no longer endorse Turbo Tax.

    • People… relax. TurboTax does not endorse a policy — their job is to inform us and help us to stay within the legislated tax laws and to avoid any confrentation with the IRS.

      TurboTax is giving you all the information you need they are NOT saying this is good or bad — it just IS. So if you want to be mad at somebody be mad at Congress, the President and the Senate. Not TurboTax.
      Sheesh!!

  50. Who is paying for the 11 million illegal aliens and the 49% who don’t paying income tax?
    I will never use turbo tax again!

  51. This is an accurate description of the various aspects of the Affordable Care Act and the comments about Intuit being a shill for Obamacare are just Tea Party blabber. Nice post. I’ve seen lots of positives so far in the office. I’ve also posted on this topic

  52. This is all a bunch of lies. It will increase costs, decrease coverage and crush our economy.

  53. I will NEVER buy any Turbo Tax Product after seeing the charts and info they are publishing about Obama Care.. They completely support it and act like its a good thing when they know along with everyone else that it is complete crap. Everyone, please support a company that doesn’t support the demise of our nation!

  54. The way you explain it Obama Care will work. It is failing, as we speak. You could have fairly addressed each of your points. But no, you sound like a paid arm of the Democratic Party.

  55. jay, you obviously did not do ANY research. The highest nominally taxed country is Belgium and they come in at around 47 percent. Nobody is anywhere near 70…….

    • Really. Aruba. Is at 58.95 plus 28 per cent capital gains. I did do research. 59 per cent plus any VAT tax and high capital gains is Amazingly close to 70 fir a portion of the population. Maybe you might try digging a little deeper before you throw out numbers also. What percent of YOUR money is enough.

  56. Why are you talking up this fiasco. Most people already know this will never work. The only way to pay for this mess is to raise more income tax or get more people working. I for one don’t want to pay 60 to 70 % in taxes. Don’t think that is true just look overseas.

    • Are you listening to the same sources that told you that Romney would be elected president? ACA is settled law and starting Oct. 1 2013 reality based citizens need income tax guidance to make informed choices.

      • the fact that you need “income tax guidance to make informed decisions” about your health care seems like a big problem to me…

        never imagined the day when TurboTax would be giving out medical / health care-related advice…

      • You’re right, this is great. When will the govt provide discount food, discount cars, and discount houses?…if we all pitched in, everything would be cheaper. But what I don’t understand is why Congress and their families, and their staffs and their families, and the President, and the Supreme Court, are exempt. I mean, this is great!

    • Farewell Turbama Tax! 3 people in my household have already been layed off and offered part time rehire by the same company…I am on Medicare – which costs me $207 a month by the way – and have already had an essential medical proceedure denied Medicare coverage!! Obama is succeeding in turning us into a 3rd world country with depotic executive rule by the “Elite”…

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