Affordable Care Act (ACA)

The ACA requires a taxpayer and each member of his/her family to have qualifying health insurance knows as Minimum Essential Coverage (MEC), OR have an exemption, OR make a Shared Responsibility Payment (SPR) when the taxpayer files his/her federal income tax return. If a taxpayer purchases insurance coverage through the Health Insurance Marketplace/Exchange, s/he may be eligible for Premium Tax Credit (PTC).

COVERAGE
  • If taxpayer has Minimum Essential Coverage (MEC), s/he doesn't need to do anything more than continue the insurance.
  • If taxpayer does not have or maintain MEC, s/he will have to get an exemption or make a payment with the federal tax return.
  • If taxpayer does not have MEC, s/he may be able to get it through the Health Insurance Marketplace/Exchange.
CREDITS
  • If taxpayer gets MEC through the health insurance Marketplace/ Exchange, s/he may be eligible for the Premium Tax Credit (PTC).
  • The PTC can be paid in advance to taxpayer's insurance company or to taxpayer when s/he files his/her federal income tax return.
  • If taxpayer was granted an advance PTC, taxpayer should report changes in circumstances that will affect the credit to the Market Place/Exchange as they happen.
PAYMENTS
  • If taxpayer does not have MEC or qualify for an exemption s/he may have to make an Individual Shared Responsibility Payment (SRP when s/he files his/her federal income tax return.
  • Generally, the payment amount is the greater of a percentage of the household income above the taxpayer's filing threshold or a fixed  amount, which varies by year. The taxpayer needs to report his/her coverage, exemption or payment on his/her federal tax return.
What Health Insurance information does a taxpayer need to bring this year to support tax preparation?
  1. Health insurance coverage information for taxpayer, spouse and all dependents.
  2. If taxpayer does not have full-year coverage, information on monthly coverage.
  3. If taxpayer purchased health insurance through the Marketplace/Exchange, Form 1095-A. S/he should receive this form by January 31.
  4. Any health care exemptions received from the IRS or the Marketplace / Exchange.
  5. All information needed to complete returns for taxpayer, spouse and for each dependent that has a filing requirement.
For more information about the Marketplace/Exchange, visit https://www.healthcare.gov/
For more information on the Affordable Care Act, go to http://www.irs.gov/Affordable-Care-Act