Even if you've heard about health care reform, you may be confused about how the law impacts you, your finances and taxes. Whether you already have health insurance or not, here are the top five things you should know.
1. The uninsured will have affordable options. Beginning Oct. 1, 2013, uninsured Americans can start shopping for affordable health insurance using online health insurance marketplaces. Most uninsured United States citizens and legal residents will be required to purchase health insurance by March 31, 2014. If you purchase your own insurance, you may be eligible for more affordable insurance. For more information, visit your state's online health insurance marketplace.
2. Insurance coverage will be expanded. If you have pre-existing medical conditions, you cannot be denied coverage. The law also extends coverage to young adults who can stay on their parents' plan until age 26. Medicaid will now be offered if you're under age 65 with a yearly income less than about $15,300, or $31,155 for a family of four.
3. You may be eligible for a government subsidy to help cover insurance costs. If you purchase health insurance through an online health insurance marketplace or exchange and have yearly income no greater than $45,960, or $94,200 for a family of four, you may be eligible for a government subsidy to help pay for health insurance. The subsidy will be in the form of a tax credit. Unlike most tax credits, you will not have to wait to receive the credit or subsidy; it will be applied to your insurance premium when you purchase in 2014.
4. You may receive a penalty if not insured by March 31, 2014. If you are required to purchase health insurance and have not done so by March 31, 2014, you will receive a penalty on your 2014 tax return (filed in 2015). The penalty in 2014 is $95 per adult and $47.50 per child, and the fee is capped at $285 or 1 percent of household income. Each year the penalty increases; in 2016, the fine rises to $695 per adult and will be capped at $2,085 or 2.5 percent of income. There is no penalty for a gap in coverage for less than three months.
5. If you have health insurance, you are already covered under the law. Not everyone will need to purchase health insurance through the online marketplaces. If you already have health insurance through your employer, Medicare or Medicaid, you are all set.
Lisa Greene-Lewis is a certified public accountant and TurboTax tax expert. She has more than 15 years of experience in tax preparation, including positions as a public auditor, controller and operations manager. For more tax-related tips, go to blog.turbotax.intuit.com.