How to Calculate Your 2014 Obamacare Tax Credit
The Obamacare health care reform mandate takes effect on January 1, 2014. As part of the Affordable Care Act, it requires Americans to buy health insurance or face a tax penalty. Starting later this year, individuals and families may purchase coverage for 2014 through state and federal health insurance exchanges. New tax credits will help them obtain coverage through the Affordable Insurance Exchange, aka Health Insurance Marketplace.
Consequently, consumers have many questions. We all want to know what we can expect to pay in premium and gain a better understanding of tax provisions—penalties and credits—as the new law takes effect.
Effective in 2014,individuals and families who purchase health insurance on their own can use the new premium tax credit to help them afford coverage purchased through a state exchange or the federal exchange. These sliding-scale credits will only be available to those who are not eligible for affordable coverage from other sources and whose incomes fall within two to four times the federal poverty level.
The opt-out penalty
For the most part,those who decide not to purchase health insurance coverage starting in 2014 can opt-out of the Exchange buy paying a penalty, which will start at $95 and never exceed more than 1 percent of total income. Exemptions apply to certain populations, such as those with brief coverage gaps, those who cannot afford coverage, members of federally recognized Indian tribes and members of recognized religious groups that object to certain benefits. The amount will increase annually.
Many health insurers have warned that premiums will increase for many Americans—individuals, families and small businesses alike. Some say such talk is nonsense. Others say both claims are stretching the truth. As such, there have been many conversations in the media and in our homes about the Affordable Care Act’s affordability. Investigating health insurance options for you, your family, and your employees can help you plan ahead for 2014.
In a press release, IHC Specialty Benefits president and Chief Executive Officer, Jeff Smedsrud said, “In 2014, everyone will be able to purchase health insurance coverage, without regard to health status–for a price. Instead of waiting to see what will happen, why not get your insurance game plan together today? Lower your health insurance costs by locking in your savings for the next year, guaranteed.”
More Obamacare calculators are appearing as 2014 nears. These online tools can help you understand the Affordable Care Act from a personalized, dollars-and-cents perspective.
In May 2013, IHC Specialty Benefits launched a Health Care Reform Calculator to help individuals and families determine how the requirement to buy health insurance coverage will specifically impact them. Simply enter your age, state, income and any additional family members’ ages to determine what you can expect to pay for a Bronze, Silver, Gold or Platinum plan through the exchanges. The cost with and without the tax credit is calculated. You can also learn whatyour opt-out penalty will be should you choose to go without qualified health insurance coverage. Small business owners who offer health insurance to their employees may also use this calculator to determine costs.