Affordable Health Care (ACA)

At ASY we understand the confusion of the Patient Protection and Affordable Care Act (ObamaCare) and how it will affect your tax return. On this page we will explain what we can, as well as leave it open for comments & questions. Please, if you have any questions about ACA, know you are not alone. Post your questions at the bottom of the page and we will answer them for you, adding them to the main body if applicable. And remember… we’re all in this together!

If you are enrolled in a health plan through your 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. Click here for a full list of qualifying plan types)

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 we need from you: All of the usual documentation you provide, plus form 1095-C or 1095-B, if you received it from your employer or private insurer, otherwise a copy of your medical card or documentation which includes your provider’s name, the names of those covered, and the insured dates.

If you purchased a health 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.

Don’t worry, we know that sounds like a lot. Just let us know if you received the subsidy and we’ll take it from there…

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 we need from you:
All of the usual documentation you usually provide, plus 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.

How do I know if I qualify for an exemption? Some of the common exemption reasons include:
• Can’t afford health insurance — the lowest-priced coverage available would cost more than 8% of household income
• 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 click here


These are the basics of how this will affect you on your taxes this year: no insurance, insurance through ObamaCare (aka Marketplace), or other insurance. For more specific questions or concerns, see the comments below…

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National Association of Tax Professionals