Affordable Care Act requires that most Americans have health insurance coverage or face a penalty on their taxes. Most Americans already have insurance through their employer, Medicaid, or Medicare, but if you’re uninsured, open enrollment for the Marketplace is now open through January 31, 2016 and is the time you and your family can sign up or renew insurance through healthcare.gov (or your state exchange).
Below are terms you may see related to the Affordable Care Act, open enrollment and tax forms you might receive around health coverage to help you understand more about the health care law and how it intersects with your taxes.
Frequently used terms:
- Affordable Care Act (ACA): The ACA is a law that requires most Americans to maintain health insurance. You now report your health insurance status on your tax return so if you are uninsured for longer than two months, you may face a tax penalty come tax time unless you qualify for an exemption. TurboTax makes reporting your health insurance status easy whether you purchased in the Marketplace or have health insurance through your employer, Medicaid, or Medicare.
- Tax Forms (1095-B, and 1095-C): During the tax season, taxpayers who have non-Marketplace health insurance (their plan wasn’t purchased on healthcare.gov or a state Marketplace) may receive the new Forms 1095-B or 1095-C — these are receipts from private insurers or employers, confirming you had or were offered coverage. Check them for accuracy and then keep them for your records. You will not need them to file your 2015 tax return.
- Tax Form 1095-A: If you purchased health insurance on healthcare.gov or your state Health Insurance Marketplace, you will still report your health insurance information from Form 1095-A on your tax returns. And like last tax season, reporting your Marketplace insurance in TurboTax will be a simple as entering your W-2.
- Marketplace: Your health insurance destination if you don’t have employer provided insurance. The Marketplace is where you can find health insurance plans for you and your family and you may be able to get assistance to help you pay for your health insurance. There are state run Marketplaces and in some states the Marketplace is ran by the federal government. Visit healthcare.gov to get information or enroll on November 1.
- Open Enrollment: Each year, the Marketplace is open for health insurance shopping for a window of time. During this time, you can change or enroll in health insurance coverage. For coverage in 2016, Open Enrollment is from November 1, 2015 – January 31 2016.
- Special Enrollment Period: This is a time outside of the open enrollment period where you and your family can sign up for health coverage. In the Marketplace, you qualify for a special enrollment period 60 days following certain life events that involve a change in family status, such as marriage or having a baby, or loss of other health coverage.
- Premiums: This is the monthly rate you pay for your health insurance plan. The payment is usually monthly, quarterly or yearly.
- Subsidies: This is a form of financial assistance provided by the government. For health insurance, this usually comes in the form of an Advanced Premium Tax Credit.
- Advanced Premium Tax Credits (APTC): Advanced assistance on your monthly premium payments that you can choose to apply to your monthly health insurance to help you pay your monthly bill. Individuals and families can qualify for APTC’s based on their income and family size.
- Individual Shared Responsibility: This is a tax penalty that you pay when filing your taxes if you are required to have health insurance and choose to go without it.
- Exemptions: If you didn’t have health insurance for more than two months in 2015, you might be exempt from paying a tax penalty. Exemptions are granted due to range of circumstances from hardships to life events. You can check TurboTax Health for a range of exemptions.
TurboTax makes it easy to report your health insurance status whether you purchase your health insurance in the Marketplace or you have health insurance provided by your employer, Medicaid, or Medicare. TurboTax also will not charge you for Affordable Care Act forms.
TurboTax is up to date with all tax laws. If you have more questions about the Affordable Care Act and your taxes you can go to TurboTaxHealth.