The Affordable Care Act passed by Congress in 2010 will be taking full effect in 2014, immediately implementing a number of tax changes on both individuals and companies. The first big one is the requirement on individuals and families to be covered by some kind of health insurance by January 1, 2014. If no coverage is obtained, the individual must pay a tax penalty on the 2014 tax return. For independent individuals this means signing up with a state health exchange before January 1, including applying eligible subsidies. This requirement also affects those employed by an employer who does not provide coverage or opts to cut coverage.
Those having trouble paying for coverage through a state health exchange may be eligible for assistance through a federal subsidy. Eligibility depends on one’s income versus the federal poverty level. However, figuring these issues out as well as those for businesses with their own requirements and employees can be very confusing. Many companies are simply giving up and dropping insurance, settling to pay the tax penalty at the end of the year. If guidance is needed, however, Sackett & Associates can help. Their in-depth knowledge and insurance experience can clear up a lot of confusion. Give them a call if needed.