Under the Obama administration, the Affordable Care Act came into effect, allowing Americans around the country to access more affordable healthcare. One aspect of the ACA that receives some controversy is the fact that you’ll receive a penalty during tax season if you are uninsured.
Many Americans do not agree with this individual mandate and it continues to receive negative feedback. If you have been uninsured in 2018, consider hiring a team to help you with tax forms and compliance issues. Firms like MZQ Consulting can provide you with summary plan description health insurance and help you with all of your ACA needs.
To get you started off on the right track, here are a few things you should know about being uninsured in 2018 and the potential penalties involved.
How much is an uninsured adult required to pay?
A huge reason the penalty receives such criticism is because it has grown exponentially over the years. It originate in 2014 and started out as $95 for an individual adult and $285 per family. Each year this dollar amount has grown; in 2018 uninsured adults are now required to pay $695 or a maximum of $2,085 per family.
What is the purpose of the penalty?
The entire concept of Obamacare came about for three main reasons. The first and primary goal of the ACA is to make health insurance more affordable and available to more people. The second is to expand the Medicaid program to include anyone with an income below 138% of the federal poverty line. Thirdly, the ACA supports innovative medical delivery methods in order to save the patient and insurance companies money.
Everyone found this all to be fine and dandy, until the news of a penalty fee for being uninsured came about. Unless you are eligible for an exemption, you will still be penalized on your 2018 taxes for lacking health insurance. The main reason for this is to ensure that Americans take the necessary steps to maintain coverage. Individuals are more likely to maintain health insurance if they are punished for doing otherwise.
How is this mandate affected by the Trump administration?
The main question for the 2018 tax season has been whether or not this mandate is still in effect under the Trump administration. The penalty is indeed still in effect, but what is likely to happen in the coming years? It is still being assessed, and the outcome is uncertain for 2019.
During his campaign, Trump claimed he would repeal the ACA and establish an alternative plan. In 2017, Republicans try to pass the American Health Care Act, but it failed to pass in Senate. There is good news, however. The Tax Cuts and Jobs Act was passed in 2017, repealing the individual mandate penalty as of 2019.
The new bill keeps the rest of the ACA intact, so healthcare will still remain affordable and Medicaid will be easily accessible.