The open enrollment deadline is coming to a close for uninsured Americans to purchase health insurance under the Affordable Care Act (ACA) on March 31.
Anyone that is required to have health insurance but doesn’t purchase health insurance by that date could be subject to a tax penalty when they file their 2014 taxes in 2015.
With just a few weeks left, we thought it would be helpful for you to see the top questions we’re seeing as they relate to the Affordable Care Act and how people are impacted.
TurboTax Health has compiled the top 5 questions along with answers to the questions below:
1. Do I qualify for a subsidy?
If you purchase your health insurance through the online Health Insurance Marketplace, you may be eligible for a government subsidy in the form of a tax credit.
However, unlike most tax credits, you will not have to wait to receive the tax credit or subsidy – it can be applied to your insurance premium in 2014 when your coverage begins. Check out this calculator to determine if you’re eligible for a subsidy.
2. How does the Affordable Care Act impact my family?
All uninsured family members may be required to be enrolled in a health plan by the March deadline.
If you or your family members are not insured, or you want to pay for your own insurance, you may be able to purchase health insurance through either a state or federal Marketplace, depending on where you live.
A family of four may qualify for a subsidy if household income is between $23,550 and $94,200, which is between one and four times the poverty level.
3. 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 helps you compare your health insurance coverage options and costs.
Each state may have an online marketplace, if not you can go to Healthcare.gov or TurboTax Health.
TurboTax Health can connect you to eHealth so you can shop for health insurance. You can also find out if you’re eligible for a subsidy, an estimate of the subsidy, your out of pocket costs, and your tax penalty if you don’t purchase health insurance.
4. Can I stay on my current health plan?
If you already have health insurance, you may be able to stay on your existing health insurance if the insurance meets minimum coverage standards under the new health care law.
If you’re currently enrolled in a health care plan through your employer, Medicare or Medicaid, or if you are on your parents’ insurance plan and your plan meets minimum essential health insurance standards under the Affordable Care Act, then you may not see much change.
If your health insurance does not meet minimum standards under the new law a recent policy change may also allow you to keep your current coverage through 2016 as long as your state commissioner allows your insurer to continue to offer out-of-date plans.
5. How does the ACA impact my taxes?
If you don’t purchase insurance by the March 31st deadline, you could receive a tax penalty on your 2014 tax return (the one you file in 2015).
The tax penalty will be prorated based on the number of months you are uninsured and will increase each year; however, there’s no penalty for a gap in coverage less than three months.
Our calculator can help estimate how much your penalty will be for tax year 2014 if you don’t purchase health insurance.
These are just a few of the top questions we’ve seen around the Affordable Care Act, but answers to all your questions, including a personalized guide to healthcare reform, are available at TurboTax Health.