Affordable Care Act Adds Additional Layers of Complexity at Tax Time

By Mickey Matran / March 12, 2015 / Uncategorized No Comments

It’s nearly tax time and this year both individual and business taxes are affected by the Affordable Care Act — also known as the ACA or Obamacare. Employers have to keep tabs on how much take home pay employees are spending on health insurance or face penalties for non-compliance. Individual tax returns now require reporting of health insurance information.

Here are some informative articles and blog posts explaining essential tax issues tied to the Affordable Care Act.

Small Business Owners Scramble to Prepare for New Tax Form. The Wall Street Journal: “Starting in 2016, under the Affordable Care Act, employers with 50 or more full-time workers are required to file new tax forms laying out what individual employees are being charged for their employer-sponsored plans. The Internal Revenue Service released the new forms on Feb. 8. Though completed forms aren’t due until next January, many employers are scrambling to get procedures in place now to collect the data. The new process entails measuring every individual full-time worker’s total monthly out-of-pocket cost for an employer health plan this year.”

How the Affordable Care Act Affects Your Tax Return. Time Warner Cable News NY1: “If you bought insurance through the Marketplace, it’s a little more complicated. By now, you should have received a 1095-A which lists who you bought your insurance from, how much you paid and whether or not you received a credit to lower the cost of your premium. That information then needs to be plugged into Form 8962, which will make sure the numbers add up.”

Will it Be IRS to the Rescue for Obamacare? CNBC: “About 7.5 million HealthCare.gov customers are at risk of losing those subsidies, which help them pay monthly premiums for health insurance plans purchased through that federally run marketplace that serves 37 states. Experts predict that more than 8 million people would become uninsured next year after finding their plans too expensive without the subsidies, and after plan prices rise to compensate for the loss of customers.”

How Six Words Landed the Affordable Care Act at the Supreme Court Again. PBS NewsHour: “DON TAYLOR, Duke University: If you imagine someone who is paying $100 a month and, all of a sudden, it’s $415 a month, which would be the average impact, then you can imagine some people are going to stop paying. Further, you would imagine the ones that wouldn’t stop paying would be the people who are the sickest who need the insurance the most. And when you only have the sick people enrolled, that’s what you — that’s when you have what’s called death spiral.”

Obamacare: Extended Sign-Up Sessions, Faulty Tax Forms, Subsidies, and What that Penalty Will Cost You. The Plain Dealer: “First, to the uninsured among you: The federal government is giving you one last chance to sign up for a health plan through the Affordable Care Act so you can avoid paying a hefty penalty in 2015. From March 15 through April 30, the Centers for Medicare & Medicaid Services – part of the U.S. Department of Health and Human Services – will hold a special enrollment period just for you. The feds want to keep you from having to pay a fine. Those who eschewed Obamacare health insurance in 2014 are subject to a fine of $95 per adult or 1 percent of annual income (up to the national average cost of a bronze plan, roughly $2,500), whichever is greater – payable at the time that you file your tax return.”

Unsure if your organization is in full compliance with Affordable Care Act regulations? Contact us. We’re happy to help.

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