Tag Archives: healthcare

New HSA Deduction Limits Released for 2017

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The IRS recently released the 2017 annual deduction limits for health savings accounts (HSA), which are typically adjusted each year for inflation.

The 2017 limits are $3,400 for an individual with self-only coverage and $6,750 for an individual with family coverage. Such deductible contributions can only be made to an HSA that is maintained in conjunction with a high-deductible health plan.

A high-deductible plan is defined as a plan with an annual deductible of $1,300 or more for self-only coverage, or $2,600 or more for family coverage. The corresponding maximum out-of-pocket expenses are $6,550 and $13,100, respectively.

Health savings accounts continue to be a powerful tool in combating the rise in health costs especially for young healthy people. Employers should continue to evaluate their effectiveness as part of an overall health benefits strategy.

If you have any questions or would like more information, please contact Mark Flanagan of Aronson’s Compensation and Benefits Practice at 301-231-6257.

The ACA Health Insurance Mandate for Individual Taxpayers

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:

  • Individuals with no affordable coverage (if the minimum payment for annual premiums is greater than 8% of the household income)
  • Individuals with a hardship exemption
  • Individuals belonging to a group specifically exempt (e.g., religious group, health care sharing ministry, American Indian tribes, incarcerated individuals, non-US citizens/nationals).

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:

  • 1% of the household income above the taxpayer’s filing threshold, or
  • $95 per adult plus $47.50 per child (limited to $285 for a family) for each month without MEC

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.

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