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Understanding the Affordable Care Act

Affordable-Care-ActThe Affordable Care Act (ACA) is a federal law that will change the rules that apply to health insurance starting in January, 2014.

Many taxpayers will qualify for a new tax credit to help pay for their insurance or may qualify for free health insurance. To receive these benefits, you generally have to file your taxes-and the tax return you filed this year will play an important role in determining whether you qualify for these new tax credits when the program rolls out next year (in 2014).

For most individuals, implementation of the Affordable Care Act (ACA) is right around the corner. This October individuals will be able to start enrolling in health insurance for 2014. Part of the process of enrolling for insurance includes determining eligibility for cost sharing subsidies, which help offset out of pocket expenses, and the premium tax credit.

To determine the amount you can receive as an advanced payment, your prior tax return will be used during the time of enrollment. This means the determination for eligibility of the PTC in 2014 is based on the 2012 tax return.  If you have not filed you 2012, it’s not too late.
Call our office at 225-925-8298 to schedule an appointment.


Affordable Care Act Tax Provisions for Individuals and Families

The Affordable Care Act, or health care law, contains new health insurance coverage and financial assistance options for individuals and families. The IRS will administer the tax provisions included in the law. Visit HealthCare.gov for more information on coverage options and financial assistance.

Do I need to do anything right now to get ready for the changes coming in 2014?
All you have to do is educate yourself by going to the Health Insurance Marketplace onHealthCare.gov. If you and your family have health care coverage, you may not have to do anything different in 2014.

Considerations for 2013

  • Open Enrollment for the Health Insurance Marketplace: The open enrollment period to purchase health care coverage through the new Health Insurance Marketplace begins Oct. 1, 2013. When you get health insurance through the marketplace, you may be able to get the new advance Premium Tax Credit that will immediately help lower your monthly premium. Learn more at HealthCare.gov.
  • Filing Requirement: If you do not have a tax filing requirement, you do not need to file a 2013 federal tax return to establish future eligibility or qualify for future financial assistance, including the advance Premium Tax Credit to purchase health care coverage through a Health Insurance Marketplace. Learn more at HealthCare.gov.
  • W-2 Reporting of Employer Coverage: Certain employers are required to report the value of the health insurance coverage they provide. The value of health care coverage as reported by your employer in box 12 and identified by Code DD on your Form W-2 is not taxable.
  • Itemized Medical Expenses: You can deduct your unreimbursed medical and dental expenses that exceed 10 percent of your adjusted gross income on your 2013 tax return. The 7.5 percent threshold will remain for those 65 and older for tax years 2013 through 2016.
  • Other ACA Tax Provisions: Additional Medicare Tax, Premium Rebate for Medical Loss Ratio,Health Flexible Spending Arrangements, Health Saving Accounts, and Net Investment Income Tax.

Looking ahead to 2014

  • Premium Tax Credits: If you get your health coverage through the marketplace, you may be eligible for a Premium Tax Credit. You can elect to have the advance credit sent directly to your insurer during 2014, or wait to claim the credit when you file your tax return in 2015. If you choose to have advance payments sent to your insurer, you will have to reconcile the payments on your tax return.
  • Individual Shared Responsibility Payment: Starting January 2014, you and your family must either have health care coverage, an exemption from coverage, or make a payment when you file your 2014 tax return in 2015.
  • Change in Circumstances: If you are receiving advance Premium Tax Credits to help pay for your insurance coverage, you should report changes such as income or family size to your marketplace. Reporting changes will help to make sure you are getting the proper amount of assistance.

Affordable Care Act Tax Provisions for Employers

Small Employers
Some of the provisions of the Affordable Care Act, or health care law, apply only to small employers, generally those with fewer than 50 full-time employees or equivalents.
If you have fewer than 50 employees, but are a member of an ownership group with 50 or more full-time equivalent employees, you are subject to the rules for large employers.

Coverage

  • Beginning Oct. 1, 2013, if you have 50 or fewer employees, you can purchase affordable insurance through the Small Business Health Options Program (SHOP).
  • To learn more about how the Affordable Care Act may affect your business, visitHealthCare.gov.

Reporting

  • Effective for calendar year 2015, if you provide self-insured health coverage to your employees, you must file an annual return reporting certain information for each employee you cover. This rule is optional for 2014.
  • Beginning Jan. 1, 2013, you must withhold and report an additional 0.9 percent on employee wages or compensation that exceed $200,000.
  • You may be required toreport the value of the health insurance coverage you provided to each employee on his or her Form W-2.

Payments & Credits

  • You may be eligible for theSmall Business Health Care Tax Credit if you cover at least 50 percent of your full-time employee’s premium costs and you have fewer than 25 full-time equivalent employees with average annual wages of less than $50,000.
  • If you self-insure, you may be required to pay a fee to help fund the Patient- Centered Outcomes Research Trust Fund.

Large Employers
Some of the provisions of the Affordable Care Act, or health care law, apply only to large employers, generally those with 50 or more full-time equivalent employees. For example, in 2015 large employers will have annual reporting responsibilities concerning whether and what health insurance they offered to their full-time employees.

Coverage

  • Beginning Oct. 1, 2013, if you have 50 or fewer employees, you can purchase affordable insurance through the Small Business Health Options Program (SHOP).
  • To learn more about market reforms and various plan requirements, visitHealthCare.gov Reporting

Reporting

  • Effective for calendar year 2015, you must file an annual return reporting whether and what health insurance you offered your employees. This rule is optional for 2014.
  • Effective for calendar year 2015, if you provide self-insured health coverage to your employees, you must file an annual return reporting certain information for each employee you cover.This rule is optional for 2014.
  • Beginning Jan. 1, 2013, you must withhold and report an additional 0.9 percent on employee wages or compensation that exceed $200,000.
  • You may be required toreport the value of the health insurance coverage you provided to each employee on his or her Form W-2.

Payment & Provisions

  • Effective for calendar year 2015, you may have to make a payment if you do not offer adequate, affordable coverage to your full-time employees, and one or more of those employees get a Premium Tax Credit.
  • If you self-insure, you may be required to pay a fee to help fund the Patient- Centered Outcomes Research Trust Fund.

Get Ready for October 1 – Set up your account today!

You can be one step closer to getting health insurance by creating your Marketplace account. Setting up your account is the first step in the process to get you ready for October 1.

Follow these quick, easy steps and you’ll be on your way:
*    Provide basic information like your name, address, and email address
*    Choose your user name and password
*    Create security questions to add an extra layer of protecting your information

When open enrollment begins October 1, you’ll be set up to apply for health coverage, compare plans side-by-side, and enroll in a plan.
Create your account today! And after you’ve set up your account, make sure to tell your family and friends to set up theirs too.

Coverage starts as soon as January 1, 2014.
Questions? Call 1-800-318-2596, 24 hours a day, 7 days a week.


 Shopping for affordable health care? Here are a couple good places to start:

Individuals under age 65:

Individuals 65 or older:

Does the Affordable Care Act apply to me?