If you purchased health insurance coverage, you’re already enjoying the peace of mind that comes with knowing you’re covered if you or a family member gets sick. This year, you also can enjoy a second benefit: knowing that you will not be required to pay a penalty to the government when you file your taxes.
But what if you only had coverage for part of the year, or received financial assistance from the government to help lower the cost of your monthly payments? Here are eight things you need to know about health insurance and your taxes.
1. What is the individual mandate and how does it affect my taxes?
The individual “mandate” (also known as the individual shared responsibility provision) requires everyone who can afford health insurance to purchase coverage or pay a tax penalty. If you can afford coverage but choose not to purchase it, the penalty will apply unless you qualify for a health coverage exemption. The amount of the penalty for failing to have coverage varies.
2. What if I only had coverage for part of the year in 2014?
According to the Centers for Medicare & Medicaid Services, you are not required to pay a penalty if you had healthcare coverage for more than nine months in 2014 or are eligible for an exemption. If you previously received an exemption or want to apply for one when filing your taxes, you will need to complete Form 8965.
3. How do I know if I qualify for a health coverage exemption?
Most people who can afford health insurance but choose not to purchase coverage will be required to pay the penalty. However, there are a variety of reasons someone might be eligible for an exemption, including hardship, living abroad or having an income below the level that requires you to file a tax return. You can find more information about exemptions here.
Read the full article here.
Contact Steven G. Cosby, MHSA with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.
