November 20, 2017
Written by Gabriella Allen, La Casa de Esperanza
This blog is one of a series from the Center for Financial Stability at La Casa de Esperanza. Check out previous blogs on ways to maintain a good credit score, car-buying tips, and smart apartment shopping.
The holidays are here and so is the healthcare marketplace open enrollment period. Whether you are signing up for health insurance for the first time or verifying coverage you’ve had for many years, here are some things to consider as open enrollment time reminds us to check up on our health insurance.
Be Cautious of Tax Penalties if You Are Not Insured
Under the Affordable Care Act, those who do not have health insurance during the year must pay a fee. In 2017, those fees were 2.5% of household income or $695 per adult, whichever is higher. This fee is enforced on your income tax return and is required to be paid by the regular tax filing deadline in April. Although there are exemptions for this fee, your eligibility for an exemption depends on specific life circumstances.
You Must Confirm your Insurance on Your Tax Return
In addition to using your tax return to calculate potential fees, the Affordable Care Act requires that your coverage be documented on your return. This means you’ll need to keep an eye out for another tax form in the mail at the beginning of the year. If you enroll in Marketplace coverage, there is a form called 1095-A that is required to be filed with your tax return. If you have another type of health insurance through your employer, you may receive a tax form that your tax preparer could need to complete your tax return. This form may be called a 1095-B or 1095-C.
Know Your Options
Knowledge is power and simply knowing your health insurance options can help you save money and stay educated. If you are working and do not have health insurance, ask your employer what they have to offer. Some employers have one specific enrollment time each year with exceptions for life events (marriage, having a baby, etc.). If you are in college and uninsured, consider taking a look at your college’s health plan. Many university health plans qualify as essential minimum coverage under the Affordable Care Act. Keep in mind that young adults can stay on their parent’s health insurance plan until age 26, even if they are married or not living with their parents. Retired or turning 65 soon? Medicare eligibility typically begins at age 65 and is also qualifying coverage under the Affordable Care Act. If none of these apply to you, take a look at www.healthcare.gov for Marketplace health insurance options.
Open enrollment for 2018 Marketplace health insurance runs from November 1, 2017 to December 15, 2017. If you are uninsured or expect to be uninsured during 2018, be sure to enroll during this period. For health insurance questions, or for information on the tax-related implications of health insurance, visit the Center for Financial Stability at La Casa de Esperanza by clicking //www.lacasadeesperanza.org/CommunityPrograms/FinancialEducation