Page 76 - March-2015-Life-in-Naples-Magazine

FINANCE
THE AFFORDABLE CARE ACT
& YOUR INDIVIDUAL SHARE RESPONSIBILITY
Tby Michael Wiener, E.A.
he Affordable Care Act includes the individual shared
responsibility provision which requires you and each
member of your family to have basic health insurance
coverage (also known as minimum essential coverage), or qualify
for an exemption from the responsibility to have minimum
essential coverage, or make an individual shared responsibility
payment when you file your federal income tax return. If you are
not required to file a tax return and don’t want to file a return, you
do not need to file a return solely to report your coverage.
What is minimum essential coverage? This is a health care plan
or arrangement specifically indentified in bought a qualified health plan from a State-based or Federally-
the law as minimum essential coverage,
including:
• Employer-sponsored coverage under a
group health plan (including self insured
plans).
• Specified government-sponsored
programs, such as Medicare Part A,
Medicare Advantage, most Medicaid
programs, Children’s Health Insurance
Program (CHIP), most TRICARE
programs (for eligible active and retired
service members), and comprehensive health care coverage of
veterans.
• Individual market coverage, such as a qualified health plan
purchased through the Marketplace or individual health coverage
purchased directly from an insurance company.
• Grandfathered heath plans (in general, certain plans that existed
before the ACA was passed).
• Other plans or programs that the Department of Health and
Human Services (HHS) recognizes as minimum essential coverage
for the purpose of the ACA.
Qualifying exemptions from health coverage. A taxpayer is exempt
from having to carry minimum essential coverage if:
• The amount he or she would have paid for the lowest cost
employer-sponsored coverage available or for coverage through the
Marketplace is more than 8% of his household income for the year.
• He or she went without minimum essential coverage for less than
three consecutive months during the year.
• His or her household income is below the taxpayer’s minimum
threshold to file a return.
• He or she was neither a U.S. citizen, U.S. national, nor an alien
lawfully present in the U.S.
• He or she was in jail, prison, or similar penal institution or
correctional facility after the disposition of charges.
Individual shared responsibility payments. A taxpayer will need
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to make an individual shared responsibility payment (SRP) when
filing the federal income tax return if: anyone in the household
does not have minimum essential coverage; and does not qualify
for a coverage exemption.
For 2014, the annual SRP amount is the greater of:
a. 1% of the household income that is above the tax return filing
threshold for the taxpayer’s filing status; or
b. The family’s flat dollar mount, which is $95 per adult and $47.50
per child (under age 18), limited to a family maximum of $285.
Premium tax credit and advance payments. Taxpayers who
facilitated Health Insurance Marketplace (Marketplace) may be
eligible for a premium tax credit.
In general, taxpayers are allowed a premium tax credit if:
• The taxpayer, spouse (if filing a joint return), or dependents were
enrolled at some time during the year in one or more qualified
health plans offered through the Marketplace, and one or more of
them was not eligible for other minimum essential coverage during
the months they were enrolled in the qualified health plan through
the Marketplace;
• The taxpayer’s income is at least 100% but not more than 400% of
the federal poverty line (FPL) for the taxpayer’s family size.
• The taxpayer cannot be claimed as a dependant on another return.
The ACA has placed many requirements on taxpayers but the
requirements do not stop there.As your tax professional I am required
to conduct sufficient due diligence to determine your coverage is
sufficient to not warrant the penalty assessment. Your return will
require additional time and computation with the possibility of
more than six new tax forms added to the filing for 2014. Without
question, return preparation time will be increased as well as time to
consider the aspects of how the ACA will impact you.
If you should have a topic that you would like me to
discuss or if you should have a question, please feel free to
call 239.403.4410 or e-mail me at
mike@cctaxandaccounting.com.
An enrolled agent, licensed by the US Department
of the Treasury to represent taxpayers before the IRS
for audits, collections and appeals. To attain the enrolled
agent designation, candidates must demonstrate expertise
in taxation, fulfill continuing education credits and adhere
to a stringent code of ethics.
Life in Naples | March 2015