Health care remains a complicated subject that risks becoming white noise on the evening news. However, the complexity of the health care laws has an impact on individual and family finances. Business owners also need to be able to answer questions from employees about health care. Companies with 50+ employees have another year before it’s mandatory to provide coverage, but health insurance is required for all individuals and dependents in 2014. Fines for individuals without coverage begin in 2014, with a $95/person penalty ($47.50 for family members under age 18) and a $285 maximum. Coverage (meeting federal minimum requirements) may come from employer plans, individual plans, a health insurance exchange, or federal program, such as Medicare, Medicaid or veterans benefits. Individuals who are not covered for less than three months won’t be penalized, as well as those who can prove a hardship forced cancellation of coverage or prevented purchase of an affordable medical insurance plan.
Other changes that affect planning for medical expenses and/or taxes include:
- Refundable tax credits for health insurance premiums are available on a sliding scale for individuals with a household income between $11,490 and $45,960 and families of four between $23,550 and $94,200.
- Medicare Part B surcharges will be as much as $300.10/month for upper income seniors (those who exceed modified adjusted gross income of $85,000 for singles or $170, 000 for couples.)
- Health Savings Accounts have an increase in the annual cap to $6,550 for families, $3,300 for individuals. $1,000 additional is available for those born prior to 1960. Out-of-pocket limits rise to $12,700 for families and $6,350 for individuals.
For more information, contact a Salmon Sims Thomas tax advisor.