The Affordable Care Act, often referred to as the ACA, was a milestone in healthcare coverage for the nation. While many have railed against the need for mandatory participation, the tax provisions that are in place are helping people this very moment. The ACA was a huge and bulky piece of legislation, and many did not understand it or the provisions in it. I have been trying to break that down into bite sized bits for people to think on. Before we think about the Republican plan to defund the Health Care Act and “throw the baby out with the bath water” I hope that this will create a better understanding.
The very first tax credit is for individuals and families. They can now claim a higher tax credit for purchasing insurance from a “Premium Exchange” system that is put in place to allow for lower prices due to competition. Beware the person who tells you that you must change your doctor or hospital. You keep what you have, and claim a higher tax credit when filing your taxes. The “Exchange” is for people who are paying a very high premium and would like to shop around. That is the change.
an Affordable Insurance Exchange. Exchanges will operate in every state and the District of Columbia. The premium tax credit is refundable so taxpayers who have little or no income tax liability can still benefit. The credit also can be paid in advance to a taxpayer’s insurance company to help cover the cost of premiums. (IRS.gov)
The credit paid to taxpayers insurance will not go into effect until 2014. Thank your Senator and Congressperson for that little delay.
The next and nearly as important tax credit is the Small Business Tax Credit. This tax credit is for businesses that hire small workforces or have only moderate incomes. This credit assists the companies in affording insurance for their employees.
. The credit is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have. (Irs.gov)
The next and important change is coverage of adult children under the age of 27. All employees who have coverage for their children can maintain the tax credits and coverage for those children until the age of 27. This change is currently in effect.
There are more changes and provisions, all of them to help defray the cost of health insurance to the consumer. The ACA was intended to create a healthy and vibrant nation by providing for coverage for every citizen. The need for every one to participate is what keeps prices down. More information can be found at Affordable Care Act Tax Provisions. Have a happy and healthy school year!
- Exchange Functions in the Individual Market: Eligibility Determinations; Exchange Standards for Employers (extendhealth.wordpress.com)
- State Convenes ACA Implementation Advisory Council (hcfama.org)