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As of Jan. 1, 2014, the Affordable Care Act requires that most Americans buy health insurance or face a tax penalty. Those who purchase health insurance coverage through the state-based and federally facilitated exchanges that make up the Health Insurance Marketplace may be eligible for tax credits that help lower monthly premiums.
Premium tax credits are available only 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. During 2015 open enrollment, 87 percent of those who purchased health insurance coverage through HealthCare.gov chose plans with financial assistance.1
Use the healthedeals.com Health Care Reform Calculator to estimate your annual health insurance premium and tax credit. Note: This credit is only available when you purchase health insurance coverage from a state-based or federally facilitated exchange.
Those who go without health insurance and do not qualify for an exemption may owe a penalty known as the shared responsibility payment when filing their federal income taxes.
If you go without coverage in 2015, the individual shared responsibility payment is the greater of2:
The penalty is capped at the cost of the national average premium for a bronze level health insurance plan purchased through the state-based and federally facilitated exchanges.3
In 2016, this penalty will increase as follows:
Each year after 2016, the shared responsibility payment will increase with inflation. 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.
With the arrival of 2014 and the first Obamacare open enrollment, many tax credit calculators appeared. These online tools can help you understand the Affordable Care Act from a personalized, dollars-and-cents perspective.
The healthedeals.com Health Care Reform Calculator helps 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 what your 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.
When you enroll in a state-based or federally facilitated health insurance plan with financial assistance, you will have two options4:
It is important to note that if your income or family size changes throughout the year, it may impact your premium tax credit. Be sure to report such changes to your state’s health insurance exchange so they may adjust your premium amount accordingly. Failing to do so may result in you owing money when filing your taxes, if your income increased or family size decreased. If your income decreases or family size increases and you fail to report it, you may receive a refund.
To learn more about health insurance coverage on and away from the Obamacare Health Insurance Marketplace, visit healthedeals.com. For help finding a health insurance plan, call 888-839-7679 to talk to an IHC representative.
1Office of the Assistant Secretary for Planning and Evaluation. "Health Insurance Marketplace 2015 Open Enrollment Period: March Enrollment Report." Washington, D.C.: Department of Health and Human Services. March 10, 2015. http://aspe.hhs.gov/health/reports/2015/MarketPlaceEnrollment/Mar2015/ib_2015mar_enrollment.pdf
3Internal Revenue Service. “The Individual Shared Responsibility Payment – An Overview.” Last reviewed or updated Feb. 19, 2015. http://www.irs.gov/Affordable-Care-Act/The-Individual-Shared-Responsibility-Payment-An-Overview
4Internal Revenue Service. “Questions and Answers on the Premium Tax Credit.” Last reviewed May 28, 2014.
About The IHC Group
The IHC Group is an organization of insurance carriers and marketing and administrative affiliates that has been providing life, health, disability, medical stop-loss and specialty insurance solutions to groups and individuals for over30 years. Members of The IHC Group include Independence Holding Company (NYSE:IHC), American IndependenceCorp. (NASDAQ: AMIC), Standard Security Life Insurance Company of New York, Madison National Life Insurance Company, Inc. and Independence American Insurance Company. Each insurance carrier in The IHC Group has a financial strength rating of A- (Excellent) from A.M. Best Company, Inc., a widely recognized rating agency that rates insurance companies on their relative financial strength and ability to meet policyholder obligations. (An A++ rating from A.M. Best is its highest rating.) Collectively, the companies in The IHC Group provide insurance coverage to more than one million individuals and groups. For more information about The IHC Group, visit www.ihcgroup.com.
About IHC Specialty Benefits, Inc.
IHC Specialty Benefits, doing business as Health eDeals Insurance Solutions is a full-service marketing and distribution company that focuses on small employer, individual and consumer products. Health eDeals markets products through general agents online, telebrokerage, advisor centers, private label and directly to consumers. For more information about Health eDeals visit www.HealtheDeals.com.