Health Insurance Tax Penalties: How will they Affect You and Your Family?

On December 22, 2017, a tax reform bill called The Tax Cut and Jobs Act of 2017 (“Tax Act” or “Tax Reform Bill”) was signed into law. One of the provisions of this bill was a drastic change to the tax penalty associated with the ACA (Affordable Care Act) Individual Mandate, which is sometimes referred to as the tax penalty, the individual mandate, or the ACA individual shared responsibility provision. Although the tax penalty has not officially been removed, it has been reduced to $0 effective January 1, 2019, the IRS will no longer seek these tax penalties
from individuals and families who declined to obtain healthcare coverage in 2019 and thereafter, starting in 2020 for taxes filed for the year of 2019. This means that essentially, there is no penalty for declining to enroll in a health plan for that calendar year of 2019. There are still plenty of reasons why it is a good idea to obtain health coverage for you and your family, but avoiding a tax penalty is not going to be one of them in 2019.
It is important to be aware that the tax penalty was enforced for 2017, and will continue to remain in force for the 2018 plan benefit year, which will be reflected on the taxes you file in 2019. There are certain exceptions to the 2018 tax penalty for certain consumers who did not obtain health insurance because it was too expensive. If you feel you may be one of these consumers, do not hesitate to give us a call at 619-215-5110 so we can determine your
eligibility and walk you through the process. Despite concerns in 2017 when the bill was passed, benefits will still be available for consumers with pre-existing conditions, and financial assistance in the form of Advanced Premium Tax Credit (APTC) and Cost Sharing Reduction (CSR), which are in place to lower the cost of health coverage through the state of California’s health care marketplace, are still going to be available for individuals and families who qualify for them in 2019. It is important to note that consumers are required to file taxes for the year they received financial assistance with their health coverage.
As always, if you have any questions, do not hesitate to reach out to one of our licensed experts. We are always here to address your concerns and provide straight answers to your questions. Give us a call at 619-259-6905, or send us an email at