PREMIUM DISCOUNTS & TAX CREDITS
Both business and individuals may be eligible for tax credits under the ACA. Thus, the credits are applied as a discount on your monthly insurance premium. Accordingly, to see if you are eligible for a tax credit, please use the Subsidy Calculator provided by the Health Insurance Marketplace. Or, if you are a business, use the Small Business Tax Credit Calculator provided by the Health Insurance Marketplace. In any case, both businesses and individuals must purchase benefits through the Health Insurance Marketplace to secure their tax credit.
PENALTIES FOR NON COMPLIANCE – Repealed in December of 2017
EMPLOYERS: Employers who have more than 50 full-time equivalent employees must offer those employees benefits that pays for 60% of the minimum essential benefits. The penalty will apply when at least one employee receives a premium tax credit in the exchange. As a result, your penalty will be $2,000 per year multiplied by the number of full-time employees, and excludes the first 30 employees. The penalty is increased each year by the growth in insurance premiums.
INDIVIDUALS: The penalty may also affect individuals who fail to obtain qualifying health insurance. Individuals can have coverage through their employer, or through an individual policy to satisfy the requirement. If you do not have qualifying health insurance, the tax penalty will be $695 for adults. Additionally, the penalty is $347.50 for each child. However, the maximum family penalty is the greater of 2.5% of income, or three times the adult penalty, which is $2,085. Accordingly, your penalty will be applied on your annual tax return.
UNDERWRITING GUIDELINES
- There is no longer a pre-existing condition clause. In other words, insurance companies can not increase rates or deny coverage because of a pre-existing condition.
- Your dependents can remain on you policy until they turn 26 years old.
- Insurance companies can not consider gender when setting rates.
- Employer renewals based on the same rates as new business.
- The waiting period for employer benefits should not exceed 90 days.
QUALIFYING COVERAGE – ESSENTIAL BENEFITS
You may be subject to a tax penalty if you do not comply with the ACA. Thus, to be in full compliance with the law, your insurance policy must cover at least 60% of the costs of the following essential benefits.
-Ambulatory patient services
-Emergency services
-Hospitalization
-Maternity and newborn care
-Prescription Drugs
-Mental health and Substance Abuse disorder services
-Rehabilitative and habilitative services and devices
-Pediatric services, including oral and vision care
-Preventive and wellness services, and chronic disease management