What Does the Affordable Care Act (or Obamacare) Mean for Me and My Taxes?

Affordable Care Act - Are You Insured?Note: The following information applies to your 2014 tax return and future tax years. We will update this page for 2015 returns as soon as information becomes available.

The Affordable Care Act, requires that almost all U.S. citizens and legal residents (and their dependents) have health insurance for the entire year. This requirement started on January 1, 2014. There is a tax fee for not having health insurance during 2014 and beyond. There are very few exceptions to this requirement, so you may qualify for a tax payment exemption.

The details of the Affordable Care Act can be confusing, so check out any of the topics below and we can help make it more understandable for you:

Who is Required to Have Health Insurance?

You must have have qualifying health insurance, qualify for an exemption, or make a payment for not having insurance when you file your tax return if you are one of the following:

  • A U.S. citizen OR

  • A non-U.S. citizen living in the United States.

What If I Already Have Health Insurance?

Important: Though the information below is for general purposes, it is specifically for the current Tax Year (2014). We will update this section for the 2015 Tax Year when the dates become available.

If you already have health insurance through your employer, a private company, or under a government program (Medicare, Medicaid, or veteran coverage) for the entire year, there is no need to change anything. However, if you have private health insurance (not through an employer), you may wish to check out the Health Insurance Marketplace anyway, in case you can find a better deal. You can get started at HealthCare.gov.

If you have had a change in income or family circumstance in 2014, you should be sure to update your information at the Marketplace by September 30, 2014. There will be instructions for updating your information on HealthCare.gov.

You need to make sure that you have the minimum essential coverage as defined by the Affordable Care Act. The minimum essential coverage includes individual policies purchased on the Health Insurance Marketplace, job-based coverage, Medicare, Medicaid, CHIP, TRICARE and others. See more about this on HealthCare.gov.

Review enrollment and other important Affordable Care Act dates.

How Will I Report My Health Insurance Coverage on My Tax Return?

If you have health insurance, you only have to check a box on your tax return (1040-EZ, 1040-A, or 1040) showing that you had health insurance for the year. When you prepare your tax return on efile.com, the software will ask you if you have health insurance, and once you answer "Yes," the software will automatically check the appropriate box on your return (so you don't have to!).

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What Forms Do I Need to Report My Health Insurance Information on My Return?

The following forms are used to report health insurance coverage on your tax return:

  • Form 1095-A - Health Insurance Marketplace Statement - You will receive this form if you purchased health insurance via the Health Insurance Marketplace exchange in 2014. It will provide information for you if you need to complete Form 8962 for the Premium Tax Credit. If you or your family members enrolled in more than one health plan via the Marketplace, you will receive a Form 1095-A for each policy. A copy of each Form 1095-A will also be sent to the IRS.
  • Form 1095-B - Health Coverage - This form is provided by your insurance provider and will have the information needed to report on your tax return that you, your spouse, and any dependents, had qualifying health insurance coverage for some of the year or for the whole year.
  • Form 1095-C - Employer-Provided Health Insurance Offer and Coverage - This form will be provided to you by your employer and contains information about the health coverage offered to you by your employer. There was a delay in the large employer mandate to provide health insurance coverage so if you do not receive this form from your employer, check with your employer's benefits department.
  • Form 8962 - Premium Tax Credit - This form will be prepared for you when you prepare your return on efile.com if you purchased health insurance through the Marketplace and you are eligible for the Premium Tax Credit.
  • Form 8965 - This form will need to be prepared by you if you are claiming that you are exempt from health care coverage.

I Still Have Not Received my Form 1098-A? What Can I Do?

You should contact the Marketplace from which you received health insurance and request a copy of your Form 1098-A. You are not required to send that form to the IRS when you file your tax return.

What If I Don't (or Won't) Have Health Insurance?

If you can afford health insurance but choose not to buy it in any month during the Tax Year, generally you will need to pay a fee that is known as the individual shared responsibility payment when you file your Tax Return on efile.com. You might be able to obtain an exemption from the payment, but that is only for certain circumstances. The payment may cause your tax refund to be lower, or might result in higher taxes due on your tax return.

Open Enrollment for 2014 has ended. Generally you cannot enroll in a private health plan for the rest of 2014. However there are exceptions to this if you have had a qualifying life event like marriage, birth of a child, or losing another health coverage. If this applies to you, you might be eligible for the special enrollment period that lets you buy coverage via the Marketplace on HealthCare.gov outside the Open Enrollment period.

The Open Enrollment period for 2015 coverage is November 15, 2014 to February 15, 2015. Take advantage of this open enrollment period if you still need health coverage. After February 15, 2015, you won't be able to buy health coverage at the Marketplace for 2015 until the next Open Enrollment period the following year (unless you qualify to apply under a special enrollment provision)

Your employer may be required to offer you health insurance, so you should check with them as well. If your employer employs 50 or more people, they are probably required to offer you health coverage. If they offer insurance to any employee, even if they have less than 50, then they must offer it to all employees.

If you can get coverage through your employer, you can still opt to get your insurance privately or through the Marketplace at HealthCare.gov (during the Open Enrollment period), but you will not qualify for a health insurance premium called a subsidy.

If you don't think you can afford to pay for health insurance, please read on.

What If I Can't Afford Health Insurance?

Affordable Care Act - How does it affect taxes?If your household income is between 100% and 400% of the federal poverty guidelines, and you do not qualify for Medicare, Medicaid, or employer-sponsored health coverage, then you may qualify for a subsidy to pay some or all of the cost of health insurance purchased through an exchange.

A health insurance premium subsidy is actually a federal tax credit, which the IRS calls the Premium Tax Credit. However, the credit is applied directly to the price of your premium and acts like a discount. The amount of your subsidy depends on your family size and income. The lower your income (and the larger your family), the higher your subsidy.

For individuals and families with incomes from 100% to 400% of the federal poverty level, the out-of-pocket cost for health coverage will be from around 2% to 9.5% of the actual price (based on a plan that covers 70% of healthcare costs). Additional funds, called cost-sharing assistance, will be made available to households with incomes lower than 250% of the poverty level.

If you still cannot afford health insurance, or you choose not to purchase it, you must pay a tax payment.

Households with incomes less than 100% of the federal poverty level will generally qualify for Medicaid. More people, including single individuals, may qualify for Medicare, if their resident states are participating in the Medicaid expansion offered by the Affordable Care Act.

What Is the Federal Poverty Level?

The federal poverty guidelines are established each year by the U.S. Department of Health and Human Services. For 2014, the official poverty level for residents of most states ranged from $11,670 for an individual to $40,090 for a family of 8.

Important Health Insurance & Tax Dates

Important: The dates below relate to your 2014 Tax Year Return. We will update this chart with the 2015 Tax Year related dates when they become available.

Health Insurance Marketplace Opened October 1, 2013
Recommended Enrollment for 2014 ended December 23, 2013
Obamacare Took Effect January 1, 2014
Open Enrollment for 2014 ended March 31, 2014
Report Income Changes to Marketplace September 30, 2014
Open Enrollment Starts for 2015 November 15, 2014
Recommend Enrollment for 2015 December 15, 2014
Coverage for 2014 Marketplace ends December 31, 2014
Open Enrollment Ends for 2015 February 15, 2015
2014 Tax Return Deadline

April 15, 2015



Related Health Care Tax Information

Tax Payments and Tax Payment Exemptions for Not Having Health Insurance

What is the Premium Tax Credit?

What Medical Expenses Can I Deduct on My Tax Return?

Health Savings Accounts and Taxes

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