Understanding the Affordable Care Act
There’s a lot of talk about the Affordable Care Act (ACA) and the Health Insurance Marketplace. But when it comes to figuring out how it all works and what it means, it can be confusing. Here are some explanations to help make it clearer.
The ACA is a law that requires most everyone have what’s called minimum essential health care coverage. By law, if you don’t have this kind of coverage, you may have to pay a tax penalty.
It’s important to know what’s required under the ACA. Here’s what you need to know as you get started:
- Most everyone needs to have health insurance.
- Open enrollment is your time to buy health insurance.
- In some instances, you can get tax credits to help you pay for your health insurance.
- Some exceptions apply.
- Not having qualified health coverage may come at a cost.
Most everyone needs to have health insurance.
What kind of coverage do you need to have to avoid paying a tax penalty? Luckily, the ACA has clear rules about what qualifies.
When you’re looking, check the health plans you’re considering to be sure it says it meets “ACA minimum essential coverage.” That means you won’t have to pay a penalty at tax time.
There are several ways to buy health insurance:
- Your employer
- Health Insurance Companies
- Health Insurance Marketplaces
Important note: You can’t be denied ACA health insurance coverage because of a health condition you had before getting health insurance (a preexisting condition) – and you can’t be charged more for your plan because of it.
If you’re looking for an ACA plan on the Health Insurance Marketplace or have questions, call 800-980-5213.
Open enrollment is your time to buy health insurance.
Open enrollment is a yearly time period set by the ACA. It’s your time to shop for individual health insurance and purchase a plan so you won’t pay a penalty at tax time. If you’re ready, you can call 800-980-5213 or go to the Health Care Marketplace at Healthcare.gov to explore your options.
If you miss this window of time to purchase a plan, there are some exceptions called Qualifying Life Events that let you buy a plan during a Special Enrollment Period.
In some instances, you can get tax credits to help you pay for your health insurance.
Depending on your family situation and annual income, you may be able to get a tax credit to help offset your health insurance costs. You can visit Healthcare.gov to see if you qualify for a tax credit before you start buying your plan.
Not having qualified health coverage may come at a cost.
In some instances, if you don’t buy a health insurance plan that meets minimum essential coverage according to the ACA, you’ll be responsible for paying a penalty fine at tax time. The penalty is calculated based on how many months you - and your family members – are without insurance during a given year.
Here’s the amount of the penalty fine for 2016. You would be required to pay the higher amount of the two options.
Yearly flat fee
$695 per year per adult
$347.50 per month per child under 18
$2,085 total maximum
2.5% of annual household income
Note: The maximum is equal to the national average cost of a premium marketplace Bronze plan.
Call 800-980-5213 to learn about ACA plans available to you.
Watch our videos on The Marketplace Made Clear
Looking for ACA tax forms?
With the ACA, there are three kinds of health care tax forms you may need in order to qualify for the health care tax credit. Here’s a little about each one:
Form 1095-A is the Health Insurance Marketplace Statement. You'll need the 1095-A form if you bought your health plan on the Marketplace.
Form 1095-B is a form from your health insurance company. It proves that you and your family have a plan that meets ACA requirements. You’ll need this if you did not buy your health plan on the Marketplace.
Form 1095-C is a form that comes from your employer. It’s the form you’ll need if you get your health plan through your employer.
Learn more about ACA tax forms from the Internal Revenue Service (IRS).