By BECKY GILLETTEConfused about what you need to do to comply with the Patient Protection and Affordable Care Act of 2010 (ACA)? You are not alone. Both individuals and business owners might not be fully aware of what to do, and how to do it, to prevent potential tax penalties.
“What is the trickiest part is regulations have continued to change over the past five years since the ACA was passed,” said Marsha H. Dieckman, CPA, partner in charge health care financial and tax services, HORNE LLP. “Regulations have continued to be released and have evolved. It has been a maze. The employer mandate got some relief in that those with 50 to 99 employees are not subject to a penalty, but they still do have to report.”
Employers with less than 50 workers don’t have to report providing proof of health insurance coverage for employees. While most businesses in the state fall in the range of less than 50 or more than 100 employees, Dieckman said there are a number in the 50-100 range that may be putting off dealing with the issue.
“I think they are confused,” Dieckman said. “There is a real struggle because no one adviser has all the answers. It takes a CPA, a human resources director and a payroll manager. That all has to come together for the reporting function. That is creating a lot of anxiety. There are rules about how you determine if you are an applicable large employer. You need information from a lot of places to do the reporting. Just to have the manpower and ability to understand the requirements is overwhelming.”
She recommends business reach out to their CPAs to help them calculate what they need to do to be able to comply in January.
“There is no once size fits all, unfortunately,” Dieckman said. “The time to get this figured out is now. Some employers have their heads in the sand.”
There is also concern about how the IRS is going to accept and process all the information. The IRS already has been under a lot of scrutiny for internal problems functioning even before being tasked with processing vast amounts of new information.
“I think we are going to learn a lot in this reporting period of January and February,” Dieckman said. “We are going to see how the IRS is going to be able to accept and process all this. What remains to be seen is how the IRS will take what is reported, compare to what is on the health insurance exchanges, determine if a penalty is due and bill the taxpayers. The logistics of how that will work remains to be seen.”
Individuals also face more increased penalties in 2016 for being uninsured. Penalties for those who can afford health insurance coverage but don’t have it go up to $695 per adult and $347.50 per child, which can add up to $2,085 per family, or a penalty of 2.5 percent of family income, whichever is higher.
Signing up for coverage for individuals and families can also be confusing. The enrollment period began Nov. 1 and ends Jan 31, 2016. Information is available at www.healthcare.gov or at www.healthcare.com, which is a joint effort of a number of insurance companies to provide more information.
While www.healthcare.gov is designed to assess whether individuals and families qualify for financial assistance to lower the cost of health insurance, some people have difficulties navigating the website and making decisions.
“This is where Merit Health can assist,” said Steve Dobbs, CEO of Merit Health, one of the healthcare providers in the state who is assisting with signing up under the ACA. “With many people not having access to a computer or having difficulty maneuvering on the government website, our application counselors can help individuals and their families evaluate the health plan options and determine if they are eligible for Medicaid or other financial assistance. We’ll also help with re-enrollment.”
Dobbs said the Health Insurance Marketplace provides U.S. citizens access to affordable health insurance coverage. Depending on household income, people may qualify for subsidies toward the cost of the premium.
“While Mississippi has not expanded Medicaid, government subsidies to help citizens obtain coverage are available, depending on income and other qualifications,” Dobbs said.
“As a primary health provider in Central Mississippi, our goal is to help educate residents in an easy-to-understand way, as well as assist those who haven’t yet signed up for health insurance or Medicaid, if qualified. During the next few months, we’ll be out in the community and meeting one-on-one to help these individuals find affordable coverage.”
Without insurance, people are not just liable for tax penalties, but to pay for their own healthcare. Those can end up being substantial.