Beginning January 1, 2014, as a result of Patient Protection and Affordable Care Act (ACA), most individuals are required to have health insurance coverage.
The ACA requires that an applicable individual and any dependent must maintain a “minimum essential coverage” (MEC) for each month during 2014. Most individuals who now have coverage through an employer-sponsored plan (including COBRA coverage) or a government-sponsored program (e.g., Medicare, Medicaid, TRICARE, Children’s Health Insurance Program, etc.) will meet the MEC requirements. However, those individuals without MEC can purchase it in the Marketplace (formerly referred to as the “Exchange”).
Certain individuals are exempt from the ACA coverage requirements:
For some exemptions to be recognized, an application with supporting documentation must be submitted to the Marketplace to obtain an exemption code required for 2014 tax return filing.
Individuals that do not have MEC coverage and do not qualify for one of the above exemptions will be subject to the shared responsibility payment (“penalty”), which is reported and due with the 2014 tax return of such individuals. For 2014, the penalty is the greater of:
The maximum penalty cannot exceed the annual premium cost of the national average bronze-level health plan. For 2014, the average annual premium for a bronze-level health plan available through the Marketplace is $2,448 per individual ($204 per month per individual), and $12,240 for a family with five or more members ($1,020 per month).
For more information on how the Affordable Care Act affects your tax situation, please contact your Aronson advisor or Anatoli Pilchtchikov of Aronson’s Personal Financial Services Group at 301.231.6200.