Though the beginning of the 2015 Health Insurance Marketplace open enrollment period is still a few months away and for the first time the requirement to have minimum essential insurance may impact your 2014 taxes that you file in 2015, it’s never too early to get the answers to your questions about Obamacare.
Below are the most common questions from TurboTax users about the Affordable Care Act. You can find more health care tips — including key facts, dates and resources — at TurboTax Health.
How does the ACA impact my taxes?
The Affordable Care Act required uninsured Americans to purchase health insurance by March 31st, 2014. If you were required to purchase health insurance but didn’t by the March 31, 2014 deadline, you may face a penalty on your 2014 tax return (the one you file in 2015). For the 2015 tax year, the deadline for open enrollment ends on February 15, 2015. Not only is the deadline earlier, but the annual one-time tax penalty will also be higher: $325 per adult and $162.50 per child, with a maximum penalty of $975 per family (or roughly two percent of total income depending on family income).
Although the health care penalty will be prorated based on the number of months you are uninsured, there’s no penalty for a gap in coverage less than three months. Find out how much your penalty would be on your 2014 taxes if you didn’t purchase health insurance by using our TurboTax calculator.
Can I stay on my current health coverage?
If you already have health insurance through your employer, Medicare, Medicaid, or your parents’ insurance plan and it meets minimum standards under the new health care law, you can stay on your existing health plan. If you have a health care plan that doesn’t meet minimum requirements, you will have to purchase health insurance coverage that meets minimum essential standards. In some cases you may be able to continue on your existing plan until October 1, 2016 even if it doesn’t meet minimum essential standards due to a two year extension announced March of this year.
Do I qualify for a subsidy?
You may be eligible for a government subsidy in the form of an advanced premium tax credit if you purchase your health insurance through the online Marketplace. Unlike most tax credits, you won’t have to wait to receive the tax credit or subsidy. It can be applied to your health insurance premium in 2015 when your coverage begins. You can find out whether you’re eligible for a subsidy by following our Affordable Health Care Guide, and learn more about subsidies here.
How does the ACA impact my family?
For 2015, in most cases all uninsured family members will be required to enroll in a health plan by the February 15 deadline. You may be able to purchase insurance through either a state or federal Marketplace, depending on where you live, if you or your family members are not insured or if you pay for your own insurance. A family of four may qualify for a subsidy if household income is between $23,850 and $95,400, which is between one and four times the poverty level. In some cases you may qualify for an exemption from the penalty if, for instance you don’t make enough money to file a tax return or you suffer a hardship. You can find out more about how the ACA affects your family here.
What next steps do I need to take to purchase insurance?
If you’re uninsured, you can shop for health insurance in the online Health Insurance Marketplace, which outlines different coverage options and costs. Although the window for 2014 open enrollment is now closed, for coverage starting in 2015, the window will reopen on November 15, 2014 and remain open until February 15, 2015. However, if you experience a life- changing event like having a baby or getting married, you may qualify for a special 60-day enrollment period under the Affordable Care Act and can make changes to your current healthcare plan.
If you have more questions about how the Affordable Care Act impacts you, TurboTax has you covered. You can get answers to your questions about how the new health care law impacts you and your taxes at TurboTax Health.