Understanding the Affordable Care Act

Key provisions of the Affordable Care Act (ACA or Obamacare) were implemented in January 2014, and many Americans remain unfamiliar with how it will affect their taxes this year. But they're not the only ones: in a survey of tax preparers, less than 7% of respondents felt “very prepared” to handle tax issues related to the ACA1. To help tax preparers educate clients on these changes — we've created a comprehensive guide to ACA, giving you everything you need to feel more prepared this tax season.

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How the Affordable Care Act Impacts Your Taxes

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Beginning this tax season, you may notice some changes on your tax return related to the Affordable Care Act, commonly referred to as just ACA or Obamacare.

We've created the following guide to help inform you of potential changes, and to ensure that you understand how the ACA might impact your tax situation this year. In this guide, you'll find specific information around (a) how the ACA might affect your taxes, (b) which new forms you'll need to look for, and (c) what documentation we'll need from you in order to complete your tax return.

To begin, find the description that best represents your current situation.



I enrolled in a health plan through my employer, private insurance, Medicare or Medicaid.

You're all set! All you will need to do is indicate that you have minimum essential coverage, a general term that includes individual market policies, job-based coverage, Medicare, Medicaid, CHIP, TRICARE and certain other coverage. For a full list of qualifying plan types, visit www.healthcare.gov/fees-exemptions/plans-that-count-as-coverage/.


NEW TAX FORMS TO EXPECT

  • Form 1095-C: Your employer may provide a separate Form 1095-C to you and to the IRS, which provides information about your plan and who was covered.
  • Form 1095-B: Private insurers and self-funded plans may provide each policyholder and the IRS with information summarizing the coverage provided on Form 1095-B.
  • Note: This year is a transition period for Forms 1095-B and 1095-C, so these forms are not a requirement for tax year 2014.

WHAT I NEED FROM YOU

  • All of the usual documentation you provide
  • Form 1095-C or 1095-B, if you received it from your employer or private insurer.


I purchased a health plan through a Health Insurance Marketplace.

To get started, just let us know that you purchased your plan through a Health Insurance Marketplace, also known as a health exchange.

Did you receive a government subsidy in the form of a tax credit to purchase health insurance through the online Health Insurance Marketplace?

Unlike most tax credits, this tax credit or subsidy could be applied to insurance premiums throughout 2014 when your coverage began. Whether or not you choose to receive this subsidy during the year, we are required to reconcile your credit on your tax return at year end.

If you overestimated your 2014 household income when you applied for the tax subsidy, you will receive the remainder of the subsidy in the form of a refundable credit, which will increase the refund amount or decrease the amount owed on your tax return. But if you earn more than you projected, you will have to pay a portion or all of the subsidy back, which will decrease the refund amount or increase the amount owed on your tax return.

In addition to a change in income, make sure to report all life changes (i.e. getting married or having a child) through your Marketplace to ensure your subsidy is correct.


NEW TAX FORMS TO EXPECT

  • Form 1095-A: If you purchased insurance through the Health Insurance Marketplace you will receive a new form, Form 1095-A, which will show details of your insurance coverage including the effective date, amount of premium and the advance premium tax credit.
  • Form 8962: If you are eligible to receive a premium tax credit in 2014, information about your advance premium tax credit will be reported and the actual premium tax credit will be determined on Form 8962.

WHAT I NEED FROM YOU

  • All of the usual documentation you provide
  • Form 1095-A, if you purchased health insurance through the Health Insurance Marketplace


I don't have health insurance.

Under the ACA, individuals who did not have health insurance for more than three months in 2014 must pay a tax penalty. However, according to Congressional Budget Office, an estimated 20 million Americans may qualify to waive that penalty this year. To find out if you qualify for an exemption, review the material below.

How do I know if I qualify for an exemption?
The Affordable Care Act recognizes there are legitimate reasons people may be exempt from paying a tax penalty for not having health insurance.

Some of the common exemption reasons include:

  • Can't afford health insurance; the lowest-priced coverage available would cost more than 8 percent of their household income
  • Had difficulty signing up for health insurance through a state or federal marketplace
  • Had medical expenses you couldn't pay in the last 24 months that resulted in substantial debt
  • Had an individual insurance plan cancelled, and believe other marketplace plans are unaffordable
  • Received a shut off notice from a utility company

For the full list of exemptions, please check www.healthcare.gov/fees-exemptions/exemptions-from-the-fee/

If you've been uninsured for fewer than three consecutive months of the year, you don't need to apply for an exemption. This will be handled when we file your 2014 taxes. Also, if you are not required to file a tax return because your income is too low, you don't need to apply for an exemption.

If you believe you qualify for one of the exemptions, please notify us as soon as possible, so we will be able to let you know whether you can claim it on your tax return or apply through the Health Insurance Marketplace along with the required documentation in certain cases. Different exemptions require different forms, so be sure to apply with the correct document. You can find and print all of the forms at healthcare.gov/exemptions.

For those exemptions that should be filed through the Health Insurance Marketplace, the approval process can take a couple of weeks, so don't wait until we file your taxes to apply for an exemption. Instead, submit your application as soon as possible. That way, it will be documented and processed in time, and we can file your tax return as soon as the IRS begins accepting returns in January.


WHAT I NEED FROM YOU

  • All of the usual documentation you provide
  • If you are getting an exemption through the Health Insurance Marketplace (also called an exchange) and not claiming the exemption directly on the tax return, you will also need to provide the exemption certificate number.

What if I'm not exempt?
If you don't have health insurance and don't qualify for an exemption, you will have to pay a penalty when you file for your 2014 tax return. If that's the case, don't worry: We will help you calculate the exact amount of your tax penalty and work to identify any qualifying deductions that may help offset this fee.

The tax penalty, also referred to as the “individual shared responsibility payment”, is based on your family size and income. The penalty will be prorated based on the number of months you are uninsured and will increase each year.

For tax year 2014, the annual one-time tax penalty will be $95 per adult, or one percent of your total income, whichever is greater. For uninsured children in your family, the penalty is $47.50 per child, with a family maximum of $285 for the year. The tax penalty is assessed on your 2014 tax return.

Each year following 2014, the penalty increases — in 2015 the penalty is $325 per person, $162.50 per child — or two percent of your income. By 2016, the penalty rises to $695 per adult, $347.50 per child — or 2.5 percent of your household income.

We know that the tax filing process can sometimes be overwhelming and that the Affordable Care Act could potentially further complicate the process. Please know that we are here to help you navigate these changes.

Affordable Care Act Client Checklist

Download the convenient checklist to assist your clients.

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Affordable Care Act Client Checklist
(Summary for Tax Professionals)

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PREMIUM TAX CREDIT

  • The Premium Tax Credit applies to your clients who enrolled in a qualified health plan offered through a Marketplace.
  • These clients will receive a Form 1095-A, Health Insurance Marketplace Statement, which must be provided to you before being able to file a tax return.
  • Information included on Form 1095-A will flow to Form 8962 in order to reconcile the amount of premium tax credit.
  • Advance payment of the premium tax credit (APTC) is a payment made for coverage during the year to the insurance provider that pays for part or all of the premiums for the coverage of the taxpayer or an individual in their tax family.
  • The taxpayer must file Form 8962 to reconcile any Advance Premium Tax Credit (APTC) against the Premium Tax Credit (PTC) eligible for the tax year. If the APTC is more than the PTC, the taxpayer will have excess APTC and must repay the excess, subject to certain limitations. If PTC is more than the APTC, the taxpayer can reduce their tax payment or increase their refund by the difference.

INDIVIDUAL SHARED RESPONSIBILITY PAYMENT

  • Beginning in 2014, your clients must have health care coverage, have a health coverage exemption, or make a shared responsibility payment with their tax return. (For clients subject to the individual shared responsibility payment, they may be eligible for the exemptions below.)
  • Minimum essential coverage is coverage under a government-sponsored program, coverage from an employer, a plan that they purchased in the individual market, or certain other coverage.
  • For 2014, the annual shared responsibility payment amount is the greater of: a) 1% of household income above filing threshold, or b) Family's flat dollar amount, $95 per adult and $47.50 per child, limited to family maximum of $285
Types of Coverage Exemptions
Granted by Marketplace
Claimed on
Tax Returns
Code for Exemption
on return
Exemption certificate #
(if granted by Marketplace)
Coverage is considered unaffordable: You cannot afford coverage because the minimum amount you must pay for premiums is more than 8% of your household income.
 
Yes
A
 
Short coverage gap: You went without coverage for less than 3 consecutive months during the year.*
 
Yes
B
 
Citizens living abroad and certain noncitizens: You are: a U.S. citizen or resident who spent at least 330 full days outside of the U.S. during a 12—month period, a U.S. citizen who is a bona fide resident of a foreign country or U.S. territory, or neither a U.S. citizen or U.S. national nor an alien lawfully present in the U.S.
 
Yes
C
 
Household income below the filing threshold: Your household income is below the minimum threshold for filing a tax return.*
 
Yes
None. Use Form 8965, Part II
 
Member of a health care sharing ministry.
Yes
Yes
D
 
Member of a federally-recognized Indian tribe.
Yes
Yes
E
 
Incarceration: You are in a jail, prison, or similar penal institution or correctional facility after the disposition of charges.
Yes
Yes
F
 
Member of a recognized religious sect.
Yes
 
None. Use Form 8965, Part I
 
Limited benefit Medicaid and TRICARE programs: You are enrolled in certain types of Medicaid and TRICARE programs that are not minimum essential coverage. (Available only in 2014.)
 
Yes
H
 
Fiscal year employer—sponsored plan: You were eligible, but did not purchase, coverage under an employer plan with a plan year that started in 2013 and ended in 2014. (Available only in 2014.)
 
Yes
H
 
Hardships:
Two or more family members' aggregate cost of self-only employer-sponsored coverage is more than 8% of household income, as is the cost of any available employer-sponsored coverage for the entire family.
 
Yes
G
 
You purchased insurance through the Marketplace during the initial enrollment period but have a coverage gap at the beginning of 2014.
 
Yes
G
 
You applied for CHIP coverage during the initial open enrollment period and were found eligible for CHIP based on that application but have a coverage gap at the beginning of 2014.
 
Yes
G
 
You are an American Indian, Alaska native, or a spouse or descendent of either who is eligible for services through an Indian health care provider.
Yes
Yes
E
 
Your gross income is below the filing threshold.*
 
Yes
None. Use Form 8965, Part II
 
You are experiencing circumstances that prevent you from obtaining coverage under a qualified health plan.
Yes
 
None. Use Form 8965, Part I
 
You do not have access to affordable coverage based on your projected household income.
Yes
 
None. Use Form 8965, Part I
 
You are ineligible for Medicaid solely because the state in which you live does not participate in the Medicaid expansion under the Affordable Care Act.
Yes
 
None. Use Form 8965, Part I
 
You have been notified that your health insurance policy will not be renewed and you consider the other plans available unaffordable.
Yes
 
None. Use Form 8965, Part I
 
You were homeless.
 
 
 
 
You were evicted or facing eviction or foreclosure in the last six months.
 
 
 
 
You received a shut-off notice from a utility company.
 
 
 
 
You recently experienced domestic violence.
 
 
 
 
You recently experienced the death of a close family member.
 
 
 
 
You experienced a fire, flood, or other natural human-caused disaster that caused substantial damage to your property.
 
 
 
 
You filed for bankruptcy in the last 6 months.
 
 
 
 
You had medical expenses that couldn't be paid in the last 24 months.
 
 
 
 
You experienced unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member
 
 
 
 
Employer Provided Health Insurance Offer and Coverage

Download summary of provisions


  • Starting 2015 tax year (optional for 2014)
  • Employers with 50 or more full-time employees are required to file Form 1095-C with employee and IRS
  • Includes information about whether employer offered qualifying health coverage to employee, spouse and dependents for some or all months during the year
  • Form 1095-C is used to determine
    • Whether employer shared responsibility provision applies (beginning in 2015),
    • Whether individual shared responsibility payment applies, and
    • Eligibility of employees for premium tax credit

SMALL BUSINESS HEALTHCARE CREDIT

  • Available to small businesses that offer insurance (Form 8941)
    • Less than or equal to 25 employees with an average salary of less than or equal to $50,000
    • Employer must cover at least 50% of the premium
  • Tax credit for small employers, including tax-exempt employers
  • Help with cost of providing health care coverage for low and moderate income workers
  • To encourage employers to offer first-time coverage and maintain existing coverage for employees

2014 CHANGES

  • 2010 — 2013
    • Credit up to 35% for employers and 25% for tax-exempt employers
  • 2014 and future
    • Credit up to 50% for employers and 35% for tax-exempt employers
    • Must purchase coverage through SHOP Marketplace
    • Credit can be claimed for two consecutive years only
    • Annual cost of living adjustment

EMPLOYEE SHARED RESPONSIBILITY PROVISION

Employer Mandate

  • Businesses with 100 or more full-time employees must offer insurance or face a penalty beginning on 1/1/15
  • Businesses with 50-99 full-time employees not be subject to employer mandate until 1/1/16
  • Businesses with fewer than 50 full-time employees are exempt
  • Applicable Large Employers (ALEs) must
    • Offer health coverage to their full-time employees and their dependents, or
    • Be subject to a penalty (generally, $2,000 per year for every employee starting with the 31st employee)
Six Things You Need to Know


The Affordable Care Act is hundreds of pages long, and impacts virtually every taxpayer and employer. When it takes effect on January 1, 2014, it is important that tax professionals understand the basics at the very least. While every page is important, we've broken down the most critical information for tax professionals into six must-know facts.

1    Health Care Reform Provides Affordable Insurance to the Uninsured

  • Beginning October 1, 2013, uninsured Americans can start shopping for affordable health insurance in the online health insurance marketplace.
  • Most uninsured U.S. citizens and legal residents will be required to purchase health insurance by March 31, 2014.


2    Health Care Reform Provides Expanded Coverage

  • Ability for young adults to stay on parents' plan until age 26.
  • Individuals with pre-existing conditions cannot be denied coverage.
  • Medicaid will now be offered to individuals under age 65 with income less than about $15,302 ($31,155 for a family of four).


3    You May Be Eligible for a Government Subsidy

  • Uninsured individuals who purchase health insurance through an online health insurance marketplace or exchange and have income no greater than about $94,200 for a family of four, may be eligible for a government subsidy to help pay for health insurance.
  • The subsidy will be in the form of a tax credit.
  • Unlike most tax credits, you will not have to wait to receive the credit or subsidy; it will be applied to your insurance premium when you purchase in 2014.


4    You Can Start Checking Insurance Options Before 2014

  • Beginning in October 2013, if you're uninsured or looking for more affordable insurance, you can visit your state's online health insurance marketplace to see your options.


5    You May Receive a Penalty if Not Insured by March 31, 2014

  • If you are required to purchase health insurance and have not done so by March 31, 2014, you will receive a penalty.
  • The tax penalty will be on your 2014 tax return filed in 2015.
  • The penalty in 2014 is $95 per adult, $47.50 per child, capped at $285 or 1 percent of household income depending on income, whichever is greater.
  • Each year the penalty increases.
  • By 2016, it rises to $695 per adult, $347.50 per child, capped at $2085 or 2.5 percent of household income, whichever is greater.
  • There is no penalty for a gap in coverage less than three months.


6    You May Be Exempt from the Health Care Reform Law



You may not be required to purchase insurance and will not see any changes in 2015 on your 2014 tax return with regard to the purchase of insurance if:

  • You already have health insurance through your employer, Medicare, Medicaid, or purchased on your own
  • You have income below the IRS tax-filing threshold ($9,750 if you are single)
  • You have financial hardship
  • The lowest cost plan option exceeds 8% of your income
  • You are American Indian







Key Dates to Remember


Key Dates to Remember



Important Updates

On February 10, 2014, the U.S. government delayed another element of the Affordable Care Act.  Under this latest announcement, medium-sized businesses will not be subject to the employer mandate (that requires them to provide health insurance to employees or face a penalty) until 2016.  Last July, the Obama administration delayed the employer mandate, which was originally set to take effect in 2014, until 2015.

Under the new regulations:

  • Businesses with between 50 and 99 employees will not face a penalty until 2016 for not
    offering insurance to employees.
  • For businesses with 100 or more employees, the percentage of the number of full-time
    employees that must be offered coverage has been reduced to 70% in 2015. For 2016 and
    later, employers must offer coverage to 95% of employees.
  • Beginning in 2015, employers with 50 or more full-time employees must offer health insurance coverage to their employees or face penalties.  On January 10, 2014, the U.S. Treasury Department announced that hours of volunteer firefighters and emergency medical personnel at governmental or tax-exempt organizations will not be required to be counted when determining full-time employees.
    Read More
  • On December 19, 2013, the U.S. Department of Health & Human Services announced that individuals who had their healthcare coverage cancelled will be exempt from the individual health plan mandate. These impacted individuals will be eligible for a hardship exemption and will be able to enroll in catastrophic coverage.
    Read More
  • U.S. Department of Health & Human Services: November 27, 2013: For small businesses in states with a SHOP Marketplace that's run by the federal government, we are making changes to make sure that you can take advantage of SHOP coverage and the tax credit as soon as  possible.
    Read More
  • On July 2, 2013, the Obama Administration delayed the mandatory employer insurance and reporting requirements by one year, or until January 1, 2015. The January 1, 2014 deadline for individuals to be insured remains unchanged.

Learn More About the Affordable Care Act


Comprehensive ACA Article


Read the Article

We have written an article that explains the important aspects of the law, and will help you better understand it. High impact provisions for individuals include:

  • You need to carry insurance beginning in 2014 unless you meet an exception
  • If you can't afford health insurance, subsidies are provided
     Read the Article     

Educational ACA Webinar


Watch the Webinar

Watch a recorded webinar that provides an in-depth explanation of the Affordable Care Act's Impact on Individuals and Small Businesses. Some of the highlights include:

  • Tax credits, penalties and mandates for individuals and businesses
  • Exceptions to the mandates
  • Various options for obtaining health insurance
  • Overview of health insurance exchanges
 Watch the Webinar 







Key Terms Explained


The Affordable Care Act may contain some terminology that you and your clients are unfamiliar with. Here is a quick glossary of key terms to help make sure both you and they understand the language of the law.

>    View Key Terms

Adjusted Gross Income (AGI) — Your gross income minus specific adjustments to income. Your AGI directly influences if you're eligible to claim many tax deductions and credits available.

Affordable Care Act (ACA) — The healthcare reform law that expands access to health coverage for all Americans and introduces new protections for people who already have health insurance.

Co-insurance — The percentage you pay to cover medical expenses after your deductible has been met.

Co-payment — A fixed amount you pay for covered healthcare services at the time medical service is provided. This amount can change based on the type of service and your health insurance plan.

Deductible — The amount you owe for healthcare costs up to a certain dollar amount. After you've paid the deductible, your health insurance plan begins to pay for your healthcare services.

Department of Health and Human Services (DHHS) — The government agency responsible for protecting the health of all Americans. The DHHS is in charge of implementing some parts of the Affordable Care Act that relate to health insurance.

Essential Health Benefits — The minimum set of core benefits health insurance plans must provide under the Affordable Care Act. This includes things like emergency services, maternity and newborn care, and prescription drugs.

Federal Poverty Level (FPL) — An income level measure issued by the Department of Health and Human Services. FPL is used to determine eligibility for certain programs and benefits and will be used to determine eligibility for health insurance through the Affordable Care Act.

Health Insurance Marketplace — Starting in October 2013, Health Insurance Marketplaces will open. These marketplaces are designed to help you find health insurance that fits your family needs and budget.

Household Income — Often used as an economic indicator, household income refers to total income from all people living in a household.

Minimum Essential Coverage — Under the Affordable Care Act, most individuals will be required to maintain this type of health insurance coverage. Government-sponsored programs (like Medicare and Medicaid), employer-sponsored plans, individual market plans, grandfathered health plans and some other types of health coverage already qualify as minimum essential coverage. If you do not have minimum essential coverage in 2014, you may have to pay a tax penalty.

Out-of-Pocket Costs — Any expenses for medical care that aren't paid for by your insurance plan.

Premium — The amount paid for your health insurance for a set time period (like monthly payments or annual payments).

Premium Assistance Credit — This is a refundable tax credit available to help people purchase health insurance, who can't afford it. People or families with household incomes of up to 400% of the federal poverty level (about $40,000 for an individual and $89,000 for a family of four in 2011), who do not qualify for other health coverage may be eligible for this credit.

Qualified Health Plan — A health insurance plan that provides essential health benefits and follows established limits on cost-sharing (like deductibles and co-payments). Under the Affordable Care Act, qualified health plans will be certified by the exchange through which they are sold.

Subsidy — The amount that the government contributes to help pay for your health insurance. Under the Affordable Care Act, this subsidy, also know as the premium assistance credit, will help people who can't afford it pay for health insurance. If you qualify for a subsidy, it will go directly to your health insurance provider when you purchase insurance to lower your monthly payments or premiums.

Tax Credit — A dollar-for-dollar reduction of the income tax you owe. Credits are usually designed to encourage or reward certain types of behavior that the government considers to be good for the economy or the environment.

Tax Deduction — Tax deductions are expenses that reduce the amount of your income that can be taxed. This can include things like medical expenses that aren't covered by insurance.

Tax Penalty — Under the Affordable Care Act, anyone who is not enrolled in a health insurance program by January 1, 2014 will receive a tax penalty, except for those who are exempt. There is no penalty for a single gap in coverage of less than 3 months.







Learn More from Government Websites


Talking to your clients about the Affordable Care Act and understanding it for yourself can be a tall task — especially since the law takes effect over such a long span of time and contains so many facets. However, each phase of the law will have an impact on your business. To read government-written, in-depth articles on all aspects of the pending legislation, click on the links below.




The Affordable Care Act Simplified for Small Businesses


On January 1, 2014, the Affordable Care Act goes into effect, and most Americans will be required to have health coverage or pay a tax penalty. Businesses with more than 50 employees are required to provide insurance, but small businesses with less than 50 employees are not required to provide insurance. If small business owners choose to provide insurance, they may be eligible for tax credits. If not, businesses can still play a unique role in helping employees get coverage.



    Read Full Article    






Affordable Care Act Small Businesses Basics


On January 1, 2014, the new health care law goes into effect requiring most Americans to have health insurance.



What you need to know:

  • If you are a business owner with fewer than 50 full-time employees, you are not required to offer health insurance
  • However, employees must have health insurance or they could be hit with a tax penalty
  • Business owners have options if they want to help employees afford insurance

Q    Do all businesses have to provide health insurance?

That depends on the number of employees. If you are a small business with fewer than 50 full-time employees, you are not required to provide health care insurance under the Act, but there are tax incentives available if you do.

Due to a recent delay of the employer mandate, employers with 50 or more employees now have until 2015 (rather than 2014) to offer health insurance benefits to their employees, or risk paying a penalty of $2000 per employee, starting with the 31st employee.



Q    How do I help my employees?

Providing health insurance can help you attract the best people and keep them healthy and productive. Plus, as of January 1, 2014, it will be the law. But we know it's expensive. Good news! You have several options to help them get coverage...affordably. Learn More



Q    How does the government define a "full-time" employee?

A full-time employee is someone who works more than 30 hours per week on average.



Q    Do employees need to have health insurance?



Yes. There will be a few exemptions granted to those who:

  • Earn less than the income amount required to file taxes ($9,350 for an individual).
  • Belong to a religious group that opposes acceptance of benefits provided by a health insurance policy.
  • Belong to a health sharing ministry, or American Indian tribe.
  • Are undocumented.
  • Are incarcerated.
  • Could not find "affordable" coverage that cost less than 9.5% of their income.

Q    What happens if employees do not have insurance?

They will be subject to penalties. The 2014 penalties for not having health insurance are as follows: $95 per adult and $47.50 per child (up to $285 per family), or 1% of the annual family income, whichever is greater. The penalty is expected to go up every year until 2016.



Q    Will there be financial help available to employees who can't afford insurance?

Yes, government subsidies will be available for low and moderate-income families.



Q    Do employers have to notify their employees about the new insurance exchanges?

All companies with at least $500,000 in annual revenue and at least 1 employee must notify their employees about health coverage options, including the existence of the new insurance exchanges by October 1, 2013. Employers are required to provide notice to each employee at the time of hiring beginning October 1, 2013. For 2014, the employer can provide notice within 14 days of the employee's starting date.

Department of Labor, Technical Release No. 2013-02: http://www.dol.gov/ebsa/newsroom/tr13-02.html

Employee notification forms:
Click here for employers who offer health insurance to at least one employee
Click here  for employers who don't offer health insurance





Important Updates

On February 10, 2014, the U.S. government delayed another element of the Affordable Care Act.  Under this latest announcement, medium-sized businesses will not be subject to the employer mandate (that requires them to provide health insurance to employees or face a penalty) until 2016.  Last July, the Obama administration delayed the employer mandate, which was originally set to take effect in 2014, until 2015.

Under the new regulations:

  • Businesses with between 50 and 99 employees will not face a penalty until 2016 for not
    offering insurance to employees.
  • For businesses with 100 or more employees, the percentage of the number of full-time
    employees that must be offered coverage has been reduced to 70% in 2015. For 2016 and
    later, employers must offer coverage to 95% of employees.
  • Beginning in 2015, employers with 50 or more full-time employees must offer health insurance coverage to their employees or face penalties.  On January 10, 2014, the U.S. Treasury Department announced that hours of volunteer firefighters and emergency medical personnel at governmental or tax-exempt organizations will not be required to be counted when determining full-time employees.
    Read More
  • On December 19, 2013, the U.S. Department of Health & Human Services announced that individuals who had their healthcare coverage cancelled will be exempt from the individual health plan mandate. These impacted individuals will be eligible for a hardship exemption and will be able to enroll in catastrophic coverage.
    Read More
  • U.S. Department of Health & Human Services: November 27, 2013: For small businesses in states with a SHOP Marketplace that's run by the federal government, we are making changes to make sure that you can take advantage of SHOP coverage and the tax credit as soon as  possible.
    Read More
  • On July 2, 2013, the Obama Administration delayed the mandatory employer insurance and reporting requirements by one year, or until January 1, 2015. The January 1, 2014 deadline for individuals to be insured remains unchanged.

Learn More About the Affordable Care Act


Comprehensive ACA Article


Read the Article

We have written an article that explains the important aspects of the law, and will help you better understand it. High impact provisions for individuals include:

  • You need to carry insurance beginning in 2014 unless you meet an exception
  • If you can't afford health insurance, subsidies are provided
     Read the Article     

Educational ACA Webinar


Watch the Webinar

Watch a recorded webinar that provides an in-depth explanation of the Affordable Care Act's Impact on Individuals and Small Businesses. Some of the highlights include:

  • Tax credits, penalties and mandates for individuals and businesses
  • Exceptions to the mandates
  • Various options for obtaining health insurance
  • Overview of health insurance exchanges
 Watch the Webinar 







Key Terms Explained


The Affordable Care Act may contain some terminology that you and your clients are unfamiliar with. Here is a quick glossary of key terms to help make sure both you and they understand the language of the law.

>    View Key Terms

Adjusted Gross Income (AGI) — Your gross income minus specific adjustments to income. Your AGI directly influences if you're eligible to claim many tax deductions and credits available.

Affordable Care Act (ACA) — The healthcare reform law that expands access to health coverage for all Americans and introduces new protections for people who already have health insurance.

Co-insurance — The percentage you pay to cover medical expenses after your deductible has been met.

Co-payment — A fixed amount you pay for covered healthcare services at the time medical service is provided. This amount can change based on the type of service and your health insurance plan.

Deductible — The amount you owe for healthcare costs up to a certain dollar amount. After you've paid the deductible, your health insurance plan begins to pay for your healthcare services.

Department of Health and Human Services (DHHS) — The government agency responsible for protecting the health of all Americans. The DHHS is in charge of implementing some parts of the Affordable Care Act that relate to health insurance.

Essential Health Benefits — The minimum set of core benefits health insurance plans must provide under the Affordable Care Act. This includes things like emergency services, maternity and newborn care, and prescription drugs.

Federal Poverty Level (FPL) — An income level measure issued by the Department of Health and Human Services. FPL is used to determine eligibility for certain programs and benefits and will be used to determine eligibility for health insurance through the Affordable Care Act.

Health Insurance Marketplace — Starting in October 2013, Health Insurance Marketplaces will open. These marketplaces are designed to help you find health insurance that fits your family needs and budget.

Household Income — Often used as an economic indicator, household income refers to total income from all people living in a household.

Minimum Essential Coverage — Under the Affordable Care Act, most individuals will be required to maintain this type of health insurance coverage. Government-sponsored programs (like Medicare and Medicaid), employer-sponsored plans, individual market plans, grandfathered health plans and some other types of health coverage already qualify as minimum essential coverage. If you do not have minimum essential coverage in 2014, you may have to pay a tax penalty.

Out-of-Pocket Costs — Any expenses for medical care that aren't paid for by your insurance plan.

Premium — The amount paid for your health insurance for a set time period (like monthly payments or annual payments).

Premium Assistance Credit — This is a refundable tax credit available to help people purchase health insurance, who can't afford it. People or families with household incomes of up to 400% of the federal poverty level (about $40,000 for an individual and $89,000 for a family of four in 2011), who do not qualify for other health coverage may be eligible for this credit.

Qualified Health Plan — A health insurance plan that provides essential health benefits and follows established limits on cost-sharing (like deductibles and co-payments). Under the Affordable Care Act, qualified health plans will be certified by the exchange through which they are sold.

Subsidy — The amount that the government contributes to help pay for your health insurance. Under the Affordable Care Act, this subsidy, also know as the premium assistance credit, will help people who can't afford it pay for health insurance. If you qualify for a subsidy, it will go directly to your health insurance provider when you purchase insurance to lower your monthly payments or premiums.

Tax Credit — A dollar-for-dollar reduction of the income tax you owe. Credits are usually designed to encourage or reward certain types of behavior that the government considers to be good for the economy or the environment.

Tax Deduction — Tax deductions are expenses that reduce the amount of your income that can be taxed. This can include things like medical expenses that aren't covered by insurance.

Tax Penalty — Under the Affordable Care Act, anyone who is not enrolled in a health insurance program by January 1, 2014 will receive a tax penalty, except for those who are exempt. There is no penalty for a single gap in coverage of less than 3 months.







Learn More from Government Websites


Talking to your clients about the Affordable Care Act and understanding it for yourself can be a tall task — especially since the law takes effect over such a long span of time and contains so many facets. However, each phase of the law will have an impact on your business. To read government-written, in-depth articles on all aspects of the pending legislation, click on the links below.








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Important disclaimers, disclosures and notes
  1. Based on survey responses of 406 tax preparers; 10/2014