The Affordable Care Act, commonly known as Obamacare, puts individuals back in charge of their healthcare. One of the key components of this law is the provision that requires you and each member of your family to have basic health coverage, also known as minimum essential coverage. If you or a member of your family do not have the minimum essential coverage, then you must qualify for a health coverage exemption, or make an individual shared responsibility payment for months without coverage or an exemption when you file your federal income tax return. The amount of the individual shared responsibility payment can be as much as $2,085 for 2016.
Many people already have minimum essential coverage. If you do, you’ll simply report your coverage when you file your 2016 tax return in 2017. If you and your family members all had minimum essential coverage for each month of the tax year, you will indicate this on your tax return by checking a box on your income tax return, Form 1040.
If you do have health coverage, you’ll receive one or more forms early next year about the health care coverage that you had or were offered during 2016. You don’t need to attach the forms to your tax return, but keep them for your records.
Here are some examples of coverage that qualify as minimum essential coverage:
- Group health insurance coverage for employees under
- a governmental plan such as the Federal Employees Health Benefit program
- a plan or coverage offered in the small or large group market within a state
- a grandfathered health plan offered in a group market
- Self-insured group health plan for employees
- COBRA coverage
- Retiree coverage
Individual health coverage:
- Health insurance you purchase directly from an insurance company
- Health insurance you purchase through the Health Insurance Marketplace
- Health insurance provided through a student health plan
Coverage under government-sponsored programs:
- Medicare Part A coverage
- Medicare Advantage plans
- Most Medicaid coverage
- Children’s Health Insurance Program, also known as CHIP
- Most types of TRICARE coverage
- Comprehensive health care programs offered by the Department of Veterans Affairs
- Department of Defense Nonappropriated Fund Health Benefits Program
- Refugee Medical Assistance
If you are a citizen of the United States, but live in a foreign country for the entire year, then you are considered to have the minimum essential coverage for the entire year.
If you need health coverage, you can visit HealthCare.gov to learn about health insurance options that are available for you and your family, how to purchase health insurance, and how you might qualify to get financial assistance with the cost of insurance.
If you have questions about the tax implications of your health insurance or lack thereof, please give us a call at (855) 479-2400 or email us at email@example.com.