The Individual Shared Responsibility Provision of the new Health Care Act, requires an Individual and each member of their family to have qualifying health insurance (called minimum essential coverage), have an exemption, or make a shared responsibility payment when you file your federal income tax return.
 

1. What is Minimum Essential Coverage (MEC)?  
   
   This level of insurance coverage considered to meet the provisions of the Affordable Care Act. Plans and coverage that contains MEC are also referred to as qualified plans.
   
   MEC includes:

• Government-sponsored programs
  • Medicare part A, most Medicaid programs, CHIP, most TRICARE, most VA programs, Peace Corps, DOD Non-appropriated Fund employees
  • Employer-sponsored coverage
    • Insured or self-insured group health plans
    • Does not include coverage that is solely excepted benefits
  • Individual market coverage
    • Qualified health plans enrolled in through Marketplace
    • Other individual coverage
  • Grandfathered plans
  • Miscellaneous MEC
    • Other health benefits coverage recognized by HHS as ME
    •   For a link to an article which summarizes plans and coverages which do and do NOT meet MEC, click here.
       

1. What are Forms 1095-A, 1095-B, and 1095-C?
   
   Form 1095-A- Health Insurance Marketplace Statement, is used to report certain information to the IRS about family members who enroll in a qualified health plan through the Marketplace.  The "Marketplace" refers to the Federal Healthcare.gov site as well as state-run healthcare exchanges.
   
   Form 1095-B- Health Coverage, is used to report certain information to the IRS and to taxpayers about individuals who are covered by MEC and therefore are not liable for the ISRP (Individual Shared Responsibility Payment). A 1095-B must be filed by every person that provide MEC to an individual during a calendar year must file an information return (1095-B) and transmittal (1094-B). 1095-B's can be issued to individuals and families that purchased a qualified plan outside of the Marketplace such as directly from an insurance agency. 
   
   Form 1095-C- Employer-Provided Health Insurance Offer and Coverage, employers with 50 or more full-time employees (including full-time equivalent employees) use Form 1094-C (transmittal) and Form 1095-C (return).
   
   These forms are then furnished to their employees and are used to complete their Individual tax returns. Form 1095-A is also furnished to individuals to allow them to claim the premium tax credit. Please see the form instructions for more information.
   
     
2. If the Taxpayer did not have MEC or an exemption is there a penalty?
   
   Yes. Individuals who do not have minimum essential coverage and do not qualify for an exemption may be liable for the individual shared responsibility payment (ISRP).
   
    
3. Who is eligible for the Premium Tax Credit?
   
   Starting in 2014, if you get your health insurance coverage through the Health Insurance Marketplace, you may be eligible for the premium tax credit.
   
    
4. What line of Form 1040 will the ISRP go on?
   
   According to the IRS draft pick list of Form 1040, the Individual responsibility will flow to Form 1040, line 61. Either the box will be checked "Full-year coverage" or an amount will display on the line if a payment is due.
   
    
   1. Will your tax organizer include ACA Questions on the Organizer Questionnaire?
      
      Yes. See ACA/ Health Coverage Questions on the Organizer Questionnaire and will have three questions to address in the tax organizer for 2014.  The three questions will be: 
      1. Did you and your dependents have health care coverage for the full-year?
          
      2. Did you receive any of the following IRS Documents? Form 1095-A (Health Insurance Marketplace Statement), 1095-B (Health Coverage) or Form 1095-C (Employer Provided Health Insurance Offer and Coverage)  If so, please attach.
          
      3. If you or your dependents did not have health care coverage during the year, do you fall into one of the following exemption categories: Indian tribe membership, health sharing ministry membership, religious sect membership, incarceration, exempt non-citizen or economic hardship? If you received an exemption certificate, please attach

 Was the 2014 enrollment period extended?

Yes, for a complete list by state of the extension periods provided to enroll,  

 State-by-state open enrollment deadline extensions

The original deadline for open enrollment for healthcare insurance in 2014 was October 1, 2013 through March 31, 2014.  14 states and DC have their own state-run exchanges while the remaining states use the Federal-run marketplace under the healthcare.gov site. 

California granted extension for enrollment.  For those that were in the enrollment process at the cutoff date of March 31, 2014, had until April 15, 2014 to complete the enrollment.  Those with paper enrollments received by April 7, 2014, had until April 30, 2014 to complete their enrollment.

Affordable Care Act Tax Penalty

Where are the inputs for the Affordable Care Act Tax Penalty in the 2013 Lacerte Tax Program?

Informational Response

The penalty affects Tax Year 2014, Important Information you need to know:

• If you are required to purchase health insurance and have not done so by March 31, 2014, you will receive a penalty.
• The tax penalty will be on your 2014 tax return filed in 2015.
• The penalty in 2014 is $95 per adult, $47.50 per child, capped at $285 or 1 percent of household income depending on income, whichever is greater.
• Each year the penalty increases.
• By 2016, it rises to $695 per adult, $347.50 per child, capped at $2085 or 2.5 percent of household income, whichever is greater.
• There is no penalty for a gap in coverage less than three months.