Whether you agree or disagree with the Affordable Care Act, the law is currently in place and will affect many in 2014. The key provision of the Act requires every person to be insured no later than March 31, 2014. If you remain uninsured after that point, you will be taxed 1% of your Adjusted Gross Income (capped at $4500 for individuals and $12,000 for families). There are both advantages and disadvantages to the Act, all of which you should be aware.
The main advantage to the Act is that it lowers health care costs overall by making insurance affordable and available for everyone; those who were insurable in the past will be able to secure affordable health insurance. Those who now use the hospital emergency room for primary care services will now see a primary care physician instead. You may begin looking at insurance Exchange Plans on the Internet starting October 1, 2013, and coverage starts January 1, 2014.
In 2015, if you have fifty or more employees, you must pay an excise tax of $2,000 per employee for whom you fail to provide health insurance. For those businesses with less than 25 employees that provide health insurance, if the average employee wage is less than $50,000 and you pay at least half of the premiums, you can get a tax credit for up to 35% of the cost.
Several disadvantages to the Act are that if you earn over $200,000 a year, ($250,000 a year for a married couple filing jointly and $125,000 for married couples filling separately), you will be taxed a .9% Medicare hospital tax on your income and self-employment profits. There is also a tax on 3.8% of the lesser of AGI that is above the threshold, or investment income, such as capital gains and dividends.
Contact W.G. Alexander & Associates today to learn more about the Affordable Care Act and how it can affect you.
Attorney Bill Alexander discussed these issues and more this past Tuesday on W.G. Alexander & Associates’ radio program, “Asset Protection Today,” on TalkRadio 850 WPTK (AM). Be sure to listen every Tuesday morning from 9:00-10:00 AM. To listen to this week’s show, please visit WPTF’s on demand show blog by clicking here.