There are just a few weeks left before the open enrollment deadline ends under the Affordable Care Act, which requires most uninsured Americans to purchase health insurance by March 31, 2014 or face a tax penalty when they file their 2014 taxes in 2015.
Some of you are aware of the requirement to purchase health insurance, but may still be unsure about what the March 31 deadline means to you.
If you have questions about the March 31 deadline and the Affordable Care Act, check out TurboTax Health where you can find out exactly how the law affects you, including whether or not you are eligible for a subsidy, an estimate of the subsidy, your out of pocket costs, and your estimated tax penalty if you don’t purchase insurance by the deadline.
Here is a breakdown of some of the answers to questions you may have about the March 31 deadline to purchase health insurance.
What Does the March 31 Deadline Mean to Me?
- The requirement to purchase health insurance by the March 31 deadline does not impact your 2013 taxes filed in 2014.
- If you are required to purchase health insurance and haven’t yet, you have until March 31, 2014 to purchase insurance through the Health Insurance Marketplace.
- If you don’t purchase health insurance by the March 31 deadline, you may face a penalty on your 2014 taxes filed in 2015. The tax penalty is based on family size and income and there is no penalty for a gap in coverage less than 3 months within a single year. For 2014, the annual one-time tax penalty will be $95 per adult, or 1 % of your total income depending on your income.
For uninsured children in your household, the penalty is $47.50 per child with a maximum family penalty of $285. The federal government has identified more than 30 ways to qualify for an exemption, including hardship cases. The IRS has a free online tool to determine if you’re eligible for an exemption. A complete list of exemptions is available at Healthcare.gov.
- If you purchase health insurance through the Health Insurance Marketplace prior to the March 31 enrollment deadline you may be eligible for a subsidy or premium tax credit to help you pay for your health insurance. You will be able to choose whether to have the subsidy applied to your premiums in advance or take it as a tax credit when you file your 2014 taxes in 2015.
- If you’re under 26, you can stay on or be added to your parents insurance even if you don’t live with them. If you just had a birthday and turned 26, you will now be required to purchase health insurance by the March 31 deadline unless you meet the exemption requirements under the Affordable Care Act.
- If you already have health insurance, you may be able to stay on your existing health insurance as long as it meets minimum standards under the new health care law. Even if it doesn’t, a recent policy change may allow you to keep your current coverage through 2016, but it will be up to your individual state commissioner whether they allow your insurance company to continue to offer insurance that doesn’t meet minimum requirements under the Affordable Care Act.
How Do I Get Health Insurance Before the March 31 Deadline?
- TurboTax Health can help you by connecting you directly to eHealth or your state or federal Health Insurance Marketplace so you can shop for insurance. TurboTax Health gives you a quick and easy way to make the best decision about health care for you and your family.
What If I Miss the March 31 Deadline?
- Unless you have a life changing event like getting married or having a child, you will have to wait until the next open enrollment period begins again on November 15, 2014 – February 15, 2015.
- If you do have a life changing event, you get a special enrollment period outside of the regular enrollment period, but you must enroll in a health plan within 60 days of the life event.
Are there any exemptions for the requirement to purchase health care by the March 31, 2014 deadline?
- There are exemptions to the new health care law ranging from those who don’t meet the IRS income tax filing requirement ($10,000 if single) to various economic hardships. You can find answers about the list of hardships eligible for exemption through TurboTax Health.
As with all tax and health care laws, TurboTax is up to date with the latest changes so you can be confident your taxes are done right. TurboTax Health is here for you if you have any questions about the Affordable Care Act and to help you understand what it means to you and your family.