Will you have to pay a penalty in 2014 for not having health insurance? Tax penalty explained – Affordable Care Act
The Affordable Care Act will expand coverage to many Americans in several different facets, and 2014 is a critical year for implementation of several mandates within the law. These deadlines have important implications for business and families throughout the country. For real estate professionals, it’s important to understand some of the more complex pieces of the act regarding taxes. Starting in 2014 new tax penalties can be enforced for those who do not obtain minimal health insurance also known as Essential Benefits (Individual Mandate).
To encourage all American’s to pursue and purchase health insurance the Affordable Care Act implemented the individual mandate, requiring everyone to have healthcare coverage. Those individuals who do not have healthcare coverage are required to pay a penalty. This is referred to as a tax for those who do not opt into health insurance exchanges or other healthcare coverage. If a family does not fall within the federal poverty guidelines, the fee is on a scheduled raise rate per year, beginning with $95 per person 1% of your income in 2014 or , $325 per person or 2% of your income in 2015, and $695 per person or 2.5% of your income in the year 2016 (you pay whichever is larger). For families, the health insurance tax is generated based on federal poverty guidelines. To avoid the penalty you should shop for major medical (essential benefits) on the Member Health Insurance Exchange or Public (government) exchange.
Remember, any members of a Native American tribe can receive an exemption as well as any individuals who went without insurance for less than three months during one year.
One of the primary goals of healthcare reform was to enable small businesses to provide affordable healthcare options for their businesses. Effective in 2010, small businesses were empowered with tax credits for their contributions towards employee healthcare plans. This applies to any employer who contributes 50% or more towards employee health costs.
Individuals and families will be eligible for a tax credit for healthcare coverage purchased through a health insurance exchange. This part of the law is relatively flexible, since it is refundable and can also be paid in advance to the health insurance company to cover premium costs.
Many real estate professionals successfully manage their own businesses with employees or work independently. Either way, it’s important to evaluate the coming tax changes and how they’ll impact you both individually and professionally.
REALTORS Benefits® Program has partnered with SASid (Smart and Simple insurance development) to help NAR member navigate their health insurance options. SASid’s teams of licensed representatives have helped thousands of members nationally enroll in member insurance programs. Visit www.Realtorsinsurancemarketplace.com or call toll free: 1-877-267-3752 (M-F 7am to 7pm CST).