Affordable Care Act

Affordable Care Act

Affordable Care Act - ACA addresses health insurance coverage, and your income taxes could also be affected. Find out about the shared responsibility payment, exemptions from the provision and the premium tax credit. ONLINE TAXES



Changes to the Patient Protection and Affordable Care Act Provisions for 2016

Individual Shared Responsibility Payment Has Increased

Taxpayers not eligible for an exemption must pay an individual shared responsibility payment and enter the payment as an additional tax on line 61 of Form 1040. For 2016, the payment amount is:
a. The greater of:
i. 2.5 percent of your household income that is above the tax return filing threshold for your filing status, or
ii. Your family's flat dollar amount, which is $695 per adult and $347.50 per child under age 18, limited to a family maximum of $2,085.
b. But capped at the cost of the national average premium for a bronze level health plan available through the Marketplace in 2016.
This calculation is made using the Shared Responsibility Payment Worksheet. See Shared Responsibility Payment, starting on page 15 of the Form 8965 instructions.

Changes to Coverage Exemptions

Some changes have been made to the coverage exemptions available for 2016. See the Types of Coverage Exemptions chart in the Instructions for Form 8965 to review the coverage exemptions that are available.

Individual Information Returns

Starting early in 2017, you may receive one or more forms relating to the health care coverage you had or were offered during the previous year. Similar to Forms W-2 and 1099, which include information about the income you received, these new health care forms provide information that you may need when you file your individual income tax return. Also like Forms W-2 and 1099, these new forms will be provided to the IRS by the entity that provides the form to you. The new forms are:

●  Form 1095-A, Health Insurance Marketplace Statement.  The Health Insurance Marketplace (Marketplace) sends this form to individuals who enrolled in coverage there, with information about the coverage, who was covered, and when. This form was also provided in early 2016 for 2015. If you are expecting to receive a Form 1095-A, you should wait to file your 2016 income tax return until you receive that form.
●  Form 1095-B, Health Coverage.  Health insurance providers (for example, health insurance companies) send this form to individuals they cover, with information about who was covered and when. Some taxpayers may not receive a Form 1095-B by the time they are ready to file their 2015 tax return. While the information on this form may assist in preparing a return, it is not required.
●  Form 1095-C, Employer-Provided Health Insurance Offer and Coverage.  Certain employers send this form to certain employees, with information about what coverage the employer offered. Employers that offer health coverage referred to as "self-insured coverage" send this form to individuals they cover, with information about who was covered and when. Some taxpayers may not receive a Form 1095-C by the time they are ready to file their 2016 tax return. While the information on this form may assist in preparing a return, it is not required.

Employer Mandate

The employer mandate (which requires large employers to cover full-time workers) started in 2016 for businesses with more than 100 full-time equivalent employees, and has been delayed until 2017 for employers with between 50-100 full-time equivalent employees.

Small Business Health Options Program and Tax Credits

Small businesses with 50 or fewer full-time equivalent employees (FTEs) are able to use the Small Business Health Options Program (SHOP) this year to get coverage and apply for health insurance tax credits. Even if your business didn't qualify for tax credits, you could still use SHOP if you meet the FTE requirement. For more details, visit healthcare.gov to find your state's SHOP portal. Also see Form 8941, Credit for Small Employer Health Insurance Premiums.