AgileHealthInsurance Report | 2017-03-07
On February 15, The IRS released a statement responding to President Trumps January Executive Order giving federal agencies authority to roll back certain provisions of the Affordable Care Act (ACA). The IRS is relaxing rules enforcing the individual mandate and will process tax returns even if a filer does not specify whether they had approved health coverage.
Under the ACA, taxpayers must indicate whether they have been covered by an ACA approved health insurance plan during the tax year. If consumers lack coverage, they are subject to the Individual Shared Responsibility Tax Payment, more commonly known as the “Obamacare Tax.” The tax is deducted from a filer’s return. The IRS is not authorized to deduct it in any other manner. ” For the 2016 tax year, that penalty is equal to 2.5% of the household adjusted gross income, or $695 per adult and $347.50 per child, up to a maximum of $2,085, whichever is higher.
While the IRS was due to enforce a rule rejecting tax returns that did not indicate whether the filer had ACA compliant coverage, the IRS has rescinded the rule, saying, "the IRS has decided to make changes that would continue to allow electronic and paper returns to be accepted for processing in instances where a taxpayer doesn’t indicate their coverage status." Those who choose not to report their status will continue to receive any tax return due.
Although this statement by the IRS has come as good news to consumers who have not wanted to purchase an ACA approved health plan, they still need to be aware that officially the tax penalty is still in effect, as is the ACA. The new presidential administration has made it clear that they intend to repeal the ACA, but time will tell what that means to consumer choice.
As the state of health care laws in the U.S. changes in the upcoming months, check back as we will be updating our learning center to keep consumers informed.
Short-term insurance has long been seen as an affordable option for those who need quality health insurance, but may not be able to afford the high premiums associated with an ACA approved plan. Click Here to learn anything you may want to know about short-term health insurance.