The Internal Revenue Service offers an assortment of online services, including features that help taxpayers understand how the Affordable Care Act will affect them at tax time.

Q:       Will the Affordable Care Act impact my tax return?
A:        This year’s tax return will include new questions to include provisions of the Affordable Care Act (ACA). Most taxpayers (about three-fourths) will just check a box to verify that they have health insurance coverage, but some taxpayers will have to take some additional steps. Visit IRS.gov/aca to learn about the premium tax credit, the individual shared responsibility requirement and other tax features of the ACA. The individual shared responsibility requirement included in the Affordable Care Act is new to the Form 1040 this filing season.

Q:       What does the ACA require taxpayers to do?

A:        The Affordable Care Act requires that all taxpayers and each member of their families have qualifying health insurance coverage for each month of the year, or qualify for an exemption or make an individual shared responsibility payment when filing the federal income tax return. Some moderate-income taxpayers may also qualify for financial assistance to help cover the cost of health insurance purchased through the Health Insurance Marketplace. Taxpayers will fall into one or more of the following categories:

·       Check the box. Most taxpayers will simply check a box on their tax return to show that each member of their family had qualifying health coverage for the whole year. No further action is required. Qualifying health insurance coverage includes coverage under most, but not all, types of health care coverage plans. Taxpayers can use the chart on IRS.gov/aca to find out if their insurance counts as qualifying coverage. 

·       Exemptions. Taxpayers may be eligible to claim an exemption from the requirement to have coverage.  Eligible taxpayers need to complete the new IRS Form 8965, Health Coverage Exemptions, and attach it to their tax return.  Taxpayers must apply for some exemptions through the Health Insurance Marketplace. However, most of the exemptions can be obtained from the IRS when filing a return.

·       Individual Shared Responsibility Payment. Taxpayers who do not have qualifying coverage or an exemption for each month of the year will need to make an individual shared responsibility payment with their return. Examples and information about figuring the payment are available on the IRS Calculating the Payment page.

·       Premium Tax Credit.  Taxpayers who bought coverage through the Health Insurance Marketplace should receive Form 1095-A, Health Insurance Marketplace Statement, from the Marketplace by early February. This form should be saved because it has important tax information. Taxpayers who should receive the form but haven’t received it by early February should contact their Marketplace. The IRS does not have access to this information.

           
            Taxpayers who got advance payments of the premium tax credit must file a federal income tax return. These taxpayers need to reconcile their advance payments with the amount of premium tax credit they’re entitled to based on their actual income. Some may see a smaller or larger tax refund or tax liability than was expected. Use IRS Form 8962, Premium Tax Credit (PTC), to calculate the premium tax credit and reconcile the credit with any advance payments.

            The IRS has set up a special section at IRS.gov/aca with more information about the Affordable Care Act and the 2014 income tax return.

Q:       Can taxpayers receive help in meeting the health care requirement?
A:        Low- and moderate-income taxpayers can get help meeting this health care requirement and filing their return for free by visiting one of the more than 12,000 community-based tax help sites staffed by more than 90,000 volunteers that participate in the Volunteer Income Tax Assistance and Tax Counseling for the Elderly (VITA/TCE) programs. To find the nearest site, use the VITA/TCE Site Locator on IRS.gov.

            The IRS also reminds taxpayers that a trusted tax professional can also provide helpful information about the health care law. A number of tips about selecting a preparer and national tax professional groups is available on IRS.gov.

The information for this “Law You Can Use” column was provided by the Internal Revenue Service. It was prepared by the Ohio State Bar Association. Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.

Q:       Can I enroll in health insurance coverage any time I want?

A:        No. If you want to buy coverage directly from a health insurance company, the company is required to offer you coverage only during an annual open enrollment period except if you have a “qualifying event” that allows you to enroll outside of the annual open enrollment period. If you have coverage through an employer, you must enroll in your employer’s health plan during your employer’s open enrollment period, although you can enroll at other times of the year if you have a qualifying event. 

            Qualifying events occur when a person loses coverage for one of the following reasons:

• the person is covered as a spouse or dependent on an employer plan and the employee passes away;
• the person is covered by an employer policy and the employee loses coverage because of a reduction in working hours or employment termination (whether voluntarily or involuntary); 
• the person loses coverage because of a divorce;
• the person becomes entitled to Social Security benefits;
• a dependent child becomes too old to stay on a parent’s plan;
• the person gains citizenship, leaves incarceration, or gains status as an Indian tribe member;
• the person moves outside his or her current insurer’s coverage area;
• a change in income or household status affects the person’s eligibility for federal health insurance subsidies or cost-sharing reductions;
• a person loses coverage because his or her employer goes bankrupt. 

            Marriage or the birth or adoption of a child can also be qualifying events, allowing you to add a new spouse or child to an existing plan. Also, if you qualify for Medicaid (generally available to individuals and families with incomes of less than 138 percent of the federal poverty limit), you can apply for Medicaid without restrictions at any time of the year. 

Q:       Do the rules about open enrollment periods and qualifying events apply to coverage under the new Affordable Care Act?
A:        Yes. Under the Affordable Care Act, insurers are required to offer coverage to anyone who applies only during open enrollment periods, except when a qualifying event requires an insurer to offer coverage outside of an open enrollment period.  

Q:       When are the open enrollment periods if I want to buy insurance from an insurance company for me or my family?
A:        If you want to buy coverage directly from an insurance company, the 2014 open enrollment period ended on March 31, 2014. The next open enrollment period (for 2015 coverage) will begin on November 15, 2014 and end on February 15, 2015, unless you have a qualifying event before that date. 

                                             

Q:       When are the open enrollment periods if I get coverage from my employer?
A:        When you are first hired, you may be able to enroll in employer coverage immediately or you may have a waiting period of up to 90 days. If you do not enroll at your first opportunity, you will have to wait until your employer’s next open enrollment period, which occurs once each year, and you may face tax penalties. Your employer will send you a notice before the open enrollment period about when you need to apply. If you miss your employer’s open enrollment period, you will need to wait for next year’s open enrollment, unless you have a qualifying event before that date. 

Q:       What are my options if I have a qualifying event?   
A:        You can enroll in your employer’s coverage, if available, you can buy coverage directly from an insurance company, or you may be able to convert the insurance coverage you are losing into an individual policy you can keep. 

Q:       If a qualifying event occurs, can I wait as along as I want to enroll in coverage?

A:        No. After a qualifying event, you must enroll in employer coverage within 30 days or get individual coverage within 60 days. If you fail to do so the special opportunity to enroll ends, and you may have to wait until the next open enrollment period.    

Q:       If I have questions, where can I go?

A:        Ask your employer’s human resource staff, an insurance company or an insurance agent to get more information. You can also visit the Ohio Department of Insurance website at www.insurance.ohio.gov or call its consumer hotline at 800-686-1526. 

 

This “Law You Can Use” column was provided by the Ohio State Bar Association. It was prepared by Douglas L. Anderson, an attorney in the Columbus office of Bailey Cavalieri LLC. Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.

Q:       If I have health insurance coverage, what changes can I expect?

A:        The changes made by the Affordable Care Act to health insurance differ depending on the type of insurance coverage you have. If you have individual or small employer group coverage, you will likely see more significant changes than if you have health insurance coverage through a large employer (one with more than 50 workers). 

Q:       I have coverage from a large employer. What changes can I expect?   
A:        In 2014, large group coverage must comply with these rules: (1) plans may not exclude coverage for pre-existing health conditions; (2) out-of-pocket spending by enrollees cannot exceed $6,350 for individual coverage and $12,700 for family coverage; and (3) plans may not impose annual or lifetime limits on the total amount a health plan is required to pay. Most large employers currently provide comprehensive coverage, so you may not see many changes.  

Q:       When do employers have to offer coverage to full-time workers?   
A:        In 2015 (not 2014), employers with more than 50 full time workers must offer coverage to full-time workers. Most large employers already satisfy this requirement, but large employers that don’t currently offer employee health insurance must begin providing coverage or face penalties. Some employers are considering dropping coverage and paying the resulting penalties or keeping employees at part-time status to avoid providing them with coverage. However, most employees are not likely to see significant changes in their health care coverage.   

Q:       If I have coverage from a small employer, what changes can I expect?
A:        Small employers (with 50 or fewer workers) may see significant changes to health benefits in 2014. Some requirements include: (1) no pre-existing condition exclusions; (2) coverage of essential health benefits that include coverage in 10 categories such as physician, hospital, prescription drug, mental health, maternity, preventive, wellness and pediatric services; (3) coverage with copays and deductibles that fall into “metal tiers” (bronze, silver, gold and platinum plans); and (4) no annual or lifetime limits. Also, the way insurers determine premium rates will change. Under the new law, insurers cannot consider the health condition of employees, and the age of employees will be only a limited factor. Therefore, small employers with healthy, younger workers are likely to pay more for insurance while small employers with older and less healthy workers likely will pay less. On average, the cost of small group coverage is expected to increase.

Q:       What if I bought my own individual health insurance policy?

A:        Ohio citizens with individual policies can expect to see many of the same changes as those covered by a small group employer, including: (1) no preexisting condition exclusions; (2) coverage of essential health benefits; (3) copay and deductibles that fall into metal tiers; and (4) no lifetime or annual limits. Your insurer will no longer consider your health status in setting your premium rate and your age will be a limited factor. Also, if you earn less than 400 percent of the federal poverty level ($45,960 for an individual; $94,200 for a family of four), you may get low-income subsidies to buy coverage through the federal government’s Health Insurance Marketplace (HealthCare.gov).  Generally, premium rates for people who are young, healthy and not eligible for subsidies may go up, while premium rates for older individuals, people with serious health conditions and lower-income families may go down. Whether premiums will go up on down for you will depend on the circumstances. 

Q:       If I don’t have coverage now, how will I be affected?

A:        Ohio recently announced it will expand Medicaid eligibility beginning on January 1, 2014 for Ohio citizens with incomes at or below 138 percent of the federal poverty level ($15,856 for an individual and $31,119 for a family of four). If your income level qualifies you, you can get Medicaid coverage without having to pay a premium. If your income is low, but not low enough to qualify you for Medicaid coverage, insurance companies can no longer deny you coverage, and the federal government will provide you with subsidies to buy affordable coverage if your income is at least 100 percent,  (and no higher than 400 percent, of the federal poverty level.

            If, however, you can afford health insurance, but decide not to buy it, you likely will have to pay a penalty on your tax return. For 2014, the penalty is $95 per adult, or 1percent of income, whichever is higher. The penalty for failure to insure children is $47.50 per child (up to $285 per family) or 1 percent of the family income, whichever is greater.

            Penalty amounts go up in 2015 to $325 per adult and $162.50 per child (up to $975 per family or 2 percent of family income, whichever is greater). In 2016 and beyond, the penalty is $695 per adult and $347 per child (up to 2.5 percent of family income, whichever is greater).

 

This “Law You Can Use” column was provided by the Ohio State Bar Association. It was prepared by Douglas L. Anderson, an attorney in the Columbus office of Bailey Cavalieri LLC. Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.

Q:       What is the Health Insurance Marketplace?
A:        The Marketplace is an informational resource you can visit online to shop for, compare and purchase health insurance coverage under the Affordable Care Act. The Marketplace will inform you if you qualify for low income tax credits to lower the cost of insurance. It will also let you know if you qualify for Medicaid coverage and will help you with Medicaid enrollment. In Ohio, the federal government operates the Marketplace. You can contact the Marketplace by visiting www.healthcare.gov or by calling 1-800-318-2596. 

Q:       Who can shop for coverage in the Marketplace?   
A:        The Marketplace offers coverage to individuals and families. Small employers with fewer than 50 full time workers can also buy Marketplace coverage for their workers, but large employers with more than 50 full time workers cannot buy coverage on the Marketplace at this time.

Q:       What kind of health insurance does the Marketplace sell?
A:        The Marketplace sells health insurance offered by private insurance companies.  Marketplace insurance is comprehensive and covers medical services including hospitalization, physician services, maternity, mental health, substance abuse, prescription drugs, lab tests, preventive services, medical devices, rehabilitation, pediatric dental and vision, and other services required by law.

Q:       Will the coverage sold through the Marketplace pay for all my health care? 
A:        In most cases, the health insurance sold by the Marketplace has copays and deductibles requiring you to pay for a part of the cost of health care when you receive it. You can choose from plans with different copays and deductibles to meet your needs.
 

Q:       How much do Marketplace health insurance premiums cost?

A:        Cost varies. Visit the Marketplace to learn what plans are available to you and how much each plan’s premium rate will be. The rate you will have to pay for insurance depends on your age, where you live, your income level and whether you use tobacco. These premium rates are designed to be affordable, so if your income is low, your premiums will also be low, and if you are eligible for Medicaid, you will pay no premiums. For most people, however, health insurance purchased through the Marketplace likely will cost several hundred dollars per person per month.

Q:       Can I buy health insurance coverage anytime I want?

A:        No. Health insurance is offered to anyone who applies, but only during open enrollment periods. The initial Marketplace open enrollment period began on October 1, 2013, and continues to March 31, 2014. During this time period, anyone who applies will be offered coverage. 

            After March 31, 2014, the open enrollment period for 2014 ends, and insurance companies will only enroll people under special circumstances, such as when a person loses his or her employer coverage. Check with the Marketplace or a health insurance company to see if you qualify for a special enrollment opportunity. The next open enrollment period (for coverage to become effective in 2015) begins on October 15, 2014, and extends until December 7, 2014.

 

Q:       What if I already have coverage?

A:        If you have employer coverage, you can stay on your employer’s health plan. If you have individual coverage, you can shop for new health insurance in the Marketplace or keep your current policy. If you have individual coverage, your coverage may change to meet new federal requirements at the time of your annual renewal in 2014, and you can shop for other coverage at that time. 

Q:       Does having employer coverage affect my ability to get low income subsidies through the Marketplace?

A:        Yes. If your employer offers you coverage that meets certain federal standards, you will not be eligible for low income subsidies through the Marketplace. Generally, if the coverage your employer provides is at least as good as coverage sold on the Marketplace, and your employer makes a minimum contribution toward the cost of coverage, you will not be able to get a low income subsidy on the Marketplace. If you do have employer coverage available to you, you should compare the costs and benefits of your employer’s health plan to the costs and benefits of the health insurance offered on the Marketplace. Check with your employer to find out the details of your employer’s health plan, and to see if your employer’s plan meets the federal minimum requirements.  

Q:       Where can I get more information about Marketplace coverage?

A:        To get more information, or to shop for coverage, contact the Marketplace by visiting www.healthcare.gov or by calling 1-800-318-2596.  

This “Law You Can Use” column was provided by the Ohio State Bar Association. It was prepared by Douglas L. Anderson, an attorney in the Columbus office of Bailey Cavalieri LLC. Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.