Newspaper article The Record (Bergen County, NJ)

Prepare Now for Health Reform Law 'S 2014 Mandates

Newspaper article The Record (Bergen County, NJ)

Prepare Now for Health Reform Law 'S 2014 Mandates

Article excerpt

Q: Now that the Affordable Care Act has been declared constitutional, I'd like to find out more about potential penalties for uninsured workers (as well as for myself) so as to make sure that I and my business are in compliance.

Beginning in 2014, applicable individuals are subject to a penalty for each month for which they fail to have adequate health insurance or "minimum essential health coverage" for themselves and their dependents, as per the Patient Protection and Affordable Care Act of 2010 and per the Health Care and Education Reconciliation Act of 2010.

Applicable individuals generally are all individual taxpayers, except for prisoners, undocumented aliens, members of health-care sharing ministries and persons with religious objections to health insurance. Applicable individuals are nonetheless exempt from the penalty under the following circumstances:

* Unaffordable coverage -- generally the lowest-cost plan option exceeds 8 percent of household income.

* Filing threshold -- household income is below their income thresholds for filing income tax returns.

* Native Americans.

* Financial hardships.

* Short lapses -- generally for a period of less than three months.

* Dependents -- since the penalty is imposed instead on the taxpayer claiming the dependency exemption.

* Individuals outside the U.S.

The liability for the penalty, also referred to as a "shared responsibility payment," is included with the taxpayer's income tax return for the tax year that includes the month for which the penalty is imposed.

Married taxpayers filing a joint return are jointly liable for the penalty that is imposed through the Internal Revenue Code on either spouse for any month during the tax year in which either spouse does not maintain minimum essential coverage. The amount of the penalty is equal to the lesser of:

* The sum of the monthly penalty amounts for the tax year, or

* The amount of the national average premium for qualified health plans that offer a bronze-level of coverage through an exchange, provide coverage for families the size of the taxpayer's family and are offered through exchanges for plan years beginning in the calendar year with or within which the tax year ends. …

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