8 Things Accountants need to tell their Clients about Health Reform

Individual Mandate: Compliant Coverage

If they do not have “ compliant coverage “ in place -  they may face a penalty for 2016  tax year.  $ 695.00 for each adult tax filer, $347.50 per child (family  maximum of $ 2085.00)  OR – 2.5 % of MAGI -  whichever is greater.


For 2015 tax year,  these were  $ 325.00 per adult and $ 162.50  per child (up to $  975.00 per family) OR 2.0% of family income, whichever is greater.

The "Affordable" of Affordable Care Act

The “ Affordable “  of the Affordable Care Act (aka Health Reform, Obamacare )  provides a “premium discount “ paid directly to insurance companies to help middle income folks pay for the new plans. This is the role of Healthcare.Gov website -  to apply for the tax credits and apply that to the insurance plans.

The ESTIMATE

Healthcare.gov or the Insurance Marketplace will ask for a ESTIMATE of income for 2016. This is the number used to calculate the premium discount. If this changes thru the year, we may contact the Marketplace to adjust the tax credit. This estimate will be reconciled with actual income reported for 2016 tax in 2017.

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