Health Care Changes
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With all the stress that tax season brings, it's hard to swallow that fact that we now have to try and understand Obamacare and get our health insurance adjustments in order, or face some penalties. Fortunately, it's TurboTax to the rescue!
Like the task of tax preparation, TurboTax offers plenty of guidance and support to help simplify what we need to do to comply with Obamacare, and avoid the confusion.
Today, our interview with “Lisa Greene-Lewis Lead CPA with TurboTax” sheds some light on those tough health care questions that may be keeping you on edge as we approach another tax season, and try to decipher how the new health care laws effect us.
Our Interview With “Lisa Greene-Lewis Lead CPA with TurboTax” Covering Obamacare: Tuesday, September 24, 2013, 12:05 PM PST
Thank you for granting us this interview, many of our readers have lots of questions about Obamacare and how it will effect their taxes, and tax returns over the coming years.
Lisa Greene-Lewis Lead CPA with TurboTax (LGL)
We are happy to help, our goal here is to answer the top trending questions that consumers have about Obamacare. TurboTax offers some online resources that will help them decipher the health care transitioning process for the Affordable Care Act so that they can implement the best choices that fit their health care needs and figure out what it means to their taxes. This will also help them with any related tax filing advantages that can positively effect their tax return refund.
(BTRS) What are the most important things to know about Obamacare and how consumers can get started with the process of determining what works best for them in the Health Care Markeplace?
- The first thing that consumers need to know is that starting in 2017 most Americans, with a few exception, will have to have health insurance coverage or they may face penalties.
- Second, if you are already insured by your employer or Medicaid, there is nothing that you have to do, no action is needed for keeping those current insurance policies in place.
- Third, the insurance marketplace opens October 1st 2013, and this is where individuals and families can go online and compare health care options to see what will fit their needs and budget.
(BTRS) So is it true that not all individuals can qualify for insurance thru the exchange?
(LGL) Yes that's true, income and poverty levels come into play when determining eligibility, and thru this online insurance exchange site, individuals and families can determine whether they are eligible for insurance thru the exchange, whether their eligible for a subsidy, or if they qualify for a subsidy or tax credit that can be applied to their tax return. Some low income individuals may even be directed to Medicaid where they may be able to get insurance for free, or at a lower cost than from other venues.
(BTRS) What is the federal poverty level that determines
(LGL) For individuals and families their “modified adjusted gross income” (MAGI) is the benchmark that determines who qualifies for insurance thru the exchange; this includes salaries, tips, wages, capital gains and other income, minus contributions to retirement plans, flexible spending accounts, and certain tax deductions that can lower your annual taxable income.
Those who make more than the federal poverty line, but less than four times the poverty line can buy subsidized insurance on the marketplaces. For 2013, the federal poverty level for an individual is $11,490, and $23,550 for a family of four. Consumers that make more than four times the poverty level will not qualify for insurance thru the exchange, $45,960 for an individual, $94,200 for a family of four.
TurboTax 2013 Tax Tip Video - Affordable Health Care Act Explained
(BTRS) What about pre-existing conditions, can individuals be denied insurance thru the exchange due to pre-existing conditions that insurance companies don't want to insure?
(LGL) No they can not be denied insurance. Unlike insurance markets today, thru the exchange you can not be denied insurance due to a pre-existing condition. Further more, they can not charge individuals more for their premium because of a pre existing condition under the minimum essential insurance guidelines.
However, consumers most likely will be charged more if they smoke.
(BTRS) Can you explain the insurance exchange structure, where it falls into different levels for the insurance plans that are available?
(LGL) Each state may have its own Marketplace which offers a variety of plans from participating health insurance companies. Each Marketplace can have four levels of insurance plans including the Bronze, Silver, Gold and Platinum – that are based on how you and the plan are set up to share your health care costs. Not all states will have their own Health Insurance Marketplace. If your state does not have its own Marketplace, then you can sign up for insurance through Healthcare.gov
The different plans are defined by Out-of-Pocket Costs, and how
individuals share in the total payments for any health care treatment.
The amount you pay for health insurance coverage each month is called
the premium. The plan you are on (bronze, gold etc.) dictates the
amount you will pay above and beyond the premium for doctor visits
– (your plan’s deductible or copayment).
The deductible is the amount individuals have to pay for covered services annually, prior to when the insurance company starts to pay. If you have a $3,000 deductible, you will be responsible for paying 100% of your health care expenses until you have paid $3,000. Once you've met your deductible, some expenses may be 100% covered, while others may require you to pay coinsurance.
(BTRS) Will we see far more limitations on doctors and doctor choices in the exchange?
(LGL) No you should not be seeing big changes in which doctors are available thru the exchange since these doctors and major health care providers will be participating and providing health care services thru the exchange. This includes Aetna, Blue Shield, and all the health care providers that offer health care insurance now, and will be available to provide insurance thru this exchange.
Furthermore, these insurance companies will now have to insure individuals that they have denied in the past due to pre-existing conditions. If you’ve been denied coverage in the past, the Health Insurance Marketplace will give you more choices and control over your health care coverage.
(BTRS) What penalties can consumers expect if they don't comply and obtain health insurance?
(LGL) Anyone that is uninsured with a few exceptions, will have to have insurance by March 31st 2017. If you do not obtain insurance by that time, you will incur a penalty of $95 per person and $47.50 per child and this penalty rate caps out at $285 annually or 1% of household income, depending on if your income exceeds certain income thresholds. Some exceptions exist for life changes you may experience where a grace period may be granted.
(BTRS) How soon can consumers sign up for and start receiving insurance coverage thru the exchange?
(LGL) Anyone can get on the exchange as of October 1st 2013 to choose and purchase their insurance package but, under the Affordable Care Act, insurance doesn't kick in until January 2017.
Also on our website we offer the
Health Care Eligibility Calculator to help consumers ease the
tension of not knowing what the Affordable Care Act will cost them
as they try to fit into the health care reform parameters. It's
a great tool to use when your not sure what it is or how it will
The TurboTax health care calculator was created to help consumers find out if they are eligible for health insurance through the Health Insurance Marketplace. This tool will also help Americans determine if they qualify for tax credits or government subsidies to help them purchase their health insurance. It's a great tool to use!