The Affordable Care Act, also known as Obamacare, is one of the biggest revamps of our healthcare system since Medicare was introduced in 1965. It changes the rules for health insurance companies, businesses and everyday people like you. With all of these changes, it’s not surprising that many people are wondering “How does it affect me?”
First and foremost, starting on January 1, 2014, everyone will be required to have health insurance, with a few exceptions for certain religious groups, native tribes, and others.
The good news is, if you already have health insurance through your employer, not much will change. You’ll be able to keep that coverage, and your kids can now be covered on your insurance until they’re 26.
If you or your family are not insured, or you pay for your own insurance, you’ll be able to purchase affordable insurance through either a state or federal Marketplace, depending on where you live. These online Marketplaces opened October 1, 2013 and will offer pre-set bronze, silver, gold and platinum plans, with different costs and levels of coverage. “Catastrophic” plans will also be available to people under 30 who meet certain income requirements.
Insurers won’t be able to discriminate against or charge higher rates for anyone based on pre-existing conditions or gender and they can’t establish annual spending caps on essential health benefits.
Wondering how you’ll afford to buy insurance? Well, the new law has two ways to help you. First, some Americans will qualify for a subsidy, also called a Premium Tax Credit. Basically, this means the government helps you pay for your insurance. How much of a subsidy depends on your age, income and number of dependents. Generally speaking, the lower your income, the bigger the subsidy.
Second, Medicaid will be expanded in many states to cover more low-income families, so they don't need to purchase insurance.
If you choose to go without health insurance in 2014, you’ll be charged an annual penalty. This amount goes up each year you don’t have insurance, and will be charged when you file your taxes, starting in 2015.
The requirement to have health insurance does not affect the taxes you file in 2014. And you can rest assured that TurboTax is always up-to-date with the latest laws.
So what do you need to do now? Educate yourself and your loved ones. You’re already off to a great start by watching this video.
The tools on TurboTax.com can help you calculate your subsidy, find the Marketplace for your state and more, so you’ll be ready when the changes come.
Not sure if you are exempt from the tax penalty or from the requirement to purchase health insurance? The TurboTax Exemption Check, is a free, online tool to help determine whether you might be eligible to waive the tax penalty entirely and apply for a health care exemption.