Federal
tax reform legislation was signed into law on December 22, 2017 and contains a
provision that eliminates the individual mandate penalty starting in year 2019.
Some may have questions about how elimination of the individual mandate penalty
may impact their health coverage. I will try to address these questions in this
video and help you understand how the elimination of the individual mandate
penalty may affect you.
What
does this mean?
-
The
only coverage-related change made by the new tax law is that the individual
mandate tax penalty will no longer be in effect beginning in 2019.
-
The
health insurance coverage, including financial assistance (subsidies/tax
premiums), will NOT change in 2018.
-
The
individual mandate penalty remains in effect for 2018 coverage; which means you
will need to be insurance if you want to avoid paying a penalty in 2018.
What
does the elimination of the individual mandate tax penalty mean for consumers?
· For 2018, individuals who can afford health
insurance but choose not to enroll for coverage will be required to pay a
penalty.
What is
the penalty for year 2018?
The
annual penalty is the greater of:
- $695
for each adult and $347.50 for each child, up to $2,085 per family.
-2.5
percent of the tax filer’s annual household income minus the federal tax filing
threshold.
· For individuals who do not buy insurance because it
would be “unaffordable” for them, in 2018 they may not be required to pay a
penalty if they file for an exemption from the penalty. Please watch our video
about the tax penalty and exemptions You may be excused from paying the penalty
if you qualify and file an exemption
Here is a
table outlining the timeline for when the individual mandate penalty applies:
Also,
when you file taxes you will need the Form 1095-A. This is your Health Insurance Marketplace
Statement. (you will receive it in the mail at the beginning of the year) You
can also contact your agent and they can help retrieving the form for you in
case you didn’t receive it via regular mail.
We always welcome
likes, shares and comments! Please feel free to comment if you
still have questions or something is unclear. If you have a specific question,
please feel free to get in touch with me. I am a California Insurance Agent,
and will be glad to help with specifics if you reside in California.
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