10 Things to Know About the Affordable Care Act

The affordable care act was signed into law 2010 and many of the provisions of the Act took effect when it was signed.  Other provisions will phase in by January 2014 and any remaining provisions phased in by 2018. The Act requires the majority of U.S. citizens and legal residents to maintain minimum health coverage or risk paying a penalty in the form of a tax. Those individuals who are not required to file an income tax returns will be exempt from the penalty. Individuals and businesses should seek advice and may need to take action to avoid penalties, comply with new payments, take advantage of tax credits, and ensure proper tax and financial statement reporting.
  • Most individuals who apply for coverage in the Marketplace will qualify for lower costs on monthly premiums based on their household size and income.
  • These tax credits can be automatically applied to monthly premiums or refunded to you after you file your federal tax return.
  • Plans are put into 5 categories (catastrophic, bronze, silver, gold, and platinum) and are based on how you and the plan expect to share the costs for healthcare.
  • If a plan covers children, they can be added or kept on the health insurance policy until they turn 26 years old.
  • Children can join or remain on a plan even if they are:
    Married
    Not living with their parents
    Attending school
    Not financial dependent of their parents
    Eligible to enroll in their employer’s plan
  • No cost or lower cost benefits for women by providing insurance options covering preventive services.
  • For Small business, you may qualify for employer health care tax credits if you have fewer than 25 full-time equivalent employees making an average of about $50,000 a year or less. To qualify for the Small Business Health Care Tax Credit, you must pay at least 50% of your full-time employees' premium costs. You don’t need to offer coverage to your part-time employees.
  • Starting in 2014, the tax credit is worth up to 50% of your contribution toward employees' premium costs (up to 35% for tax-exempt employers). The tax credit is highest for companies with fewer than 10 employees who are paid an average of $25,000 or less. The smaller the business, the bigger the credit. You can find out if you qualify for the small business health care tax credit by visiting IRS.gov. You can also consult with your tax advisor or accountant to learn if you qualify, and if so, how much your credit will be.
  • If you have more than 50 full-time equivalent (FTE) employees, you generally won't be able to use the SHOP Marketplace to offer health insurance to them. Starting in 2016, all SHOPs will be open to employers with up to 100 FTEs.
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