Sure, you know everyone has to purchase health insurance (or pay a penalty) as a result of the Affordable Care Act, but the health reform law affects people more than that. Have you considered your taxes?
It may be two years away, but it’s important to keep in mind that in 2014, Americans need to be able to show that they had health insurance coverage for the entire calendar year, according to H&R Block. No coverage means a penalty that’s included on the tax return.
If you’re getting coverage through your employer, then you don’t have much to worry about. Employers do, however, have to report the amount of health insurance premiums paid on employees’ Form W-2, according to H&R Block. The purpose of this is just “to help facilitate the implementation of the individual mandate provisions and to help employees understand and make comparisons about insurance costs.”
Where individuals should pay attention is if they will be purchasing insurance through a state-based insurance exchange. People in the state-based exchanges might be eligible for a government-provided subsidy to cover a portion of their monthly premiums.
“Individuals that obtain coverage through the state based exchanges will also receive a reporting document from the exchange that details the months the individual had health coverage and the amount of monthly subsidy, if any, received,” according to H&R Block.
However, the tax credit that helps individuals and families afford health insurance doesn’t take effect until 2014, the same year Americans will be made to pay a penalty if they choose not to purchase insurance coverage.