Soar to Success June 2016

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I’m back again this month
discussing The Patient
Protection and Affordable Care
Act which is, by far, one of the
most complex reforms to our
healthcare system. Regardless
ofwhether youareproor against
it, it comes with rules you should
know about or be prepared to
pay an additional tax known as
the Shared Responsibility Tax.
The April and May issues of
Soar To Success featured parts
1 and 2 of this 4 part series
where I discussed my most
frequently asked tax questions
of 2016 which is “How much is
the penalty if I didn’t have health
insurance last year?” and “What
are the exemptions for the
penalties?” If you missed these
articles, I encourage you to go
back and read them.
The third most common
question I get is
“What exactly is the Exchange
and do I have to get my health
insurance there?”
The health insurance exchange
is an online marketplace
where both individuals and
small employers can shop for
and obtain health insurance
coverage. There is a period of
time where you should enroll
for coverage, referred to as
open enrollment period and,
for the 2017 calendar year, this
begins November 1st , 2016 and
ends on January 31st, 2017.
Unfortunately, life doesn’t
always come in nice neat
packages so there are certain
life events that allow a taxpayer
to obtain health insurance
coverage through the exchange
outside of this enrollment
period. Events such as the birth
of a baby, adoption, divorce
or legal separation and loss of
qualifying health coverage all
may qualify for you to obtain
coverage through the exchange
outside of the enrollment
period.
There are many online
marketplaces that exist and, in
fact, there are 13 state-based
marketplaces, 4 federally-
supported marketplaces, 7
state-partnership marketplaces
and 27 federally-facilitated
marketplaces. If you are
covered through your employer
or your spouse’s employer
then the exchange is probably
unnecessary for you. Those
who don’t have health insurance
currently and need to purchase
their own are encouraged to do
so through the exchange but
it’s not required. You are able
to go directly to a provider and
obtain coverage but you may
want to shop at the exchange to
compare prices.
Shopping for and obtaining
health insurance through
the exchange is primarily
accomplished online. You can
visit healthcare.gov or visit your
state-run exchange, if there is
one, and set up an account by
providing information such as
your income, age and address.
You’ll be provided with a list of
policies available as well as any
eligibility for federal subsidy. If
your income level qualifies you
for a tax credit subsidy, it will
be applied to and reduce your
monthly premium amount.
Reporting your income is a bit
trickier; marketplace savings
are based on your expected
household income for 2016,
not 2015 income. Income
reported should include yours,
your spouse’s, if married, and
everyone you’ll claim as a tax
PART 3
AFFORDABLE CARE ACT
FREQUENTLY ASKED QUESTIONS
BY TINA MOE, CPA
SOAR TO SUCCESS / June 2016 / Core Business Strategy