The federal Affordable Care Act is aimed at getting more Americans insured. To do that, people are required to carry health insurance or pay a fine. Those fines will begin popping up next year, and some tax filing groups are trying to help people examine their options for becoming insured and avoiding the penalty.
H&R block, one of the largest tax filing companies in the United States, is working to help people find out whether they qualify for insurance subsidies on an exchange, or if they’re eligible for Medicaid—should Florida lawmakers expand eligibility under the Affordable Care Act. The product also shows customers the consequence of NOT being insured, which is a fine. And Kathy Pickering, who heads H&R Block’s Tax Institute, says people have had mixed reactions the results.
“Those who haven’t had insurance coverage or had it or lost it...they’re saying, ‘great, I can get my family covered?’ That’s going to be manageable because they understand the importance of the coverage. To the others who are saying, ‘wow, that’s a lot of money. I’m having a hard time affording groceries right now I don’t know how I’m going to afford that," Pickering said.
The fines for not carrying insurance would be levied in the form of a tax by the federal government, and go into effect in 2014.
Meanwhile, businesses with more than 50 employees will also be required to offer coverage or pay a penalty, but for small businesses, that requirement is optional. Businesses with fewer than 25 employees are eligible for tax credits, and Pickering says many owners still aren’t aware of those benefits:
“It’s a little bit complicated and I don’t think people have fully understood it. If you aren’t already providing insurance it doesn’t quite give them enough motivation to go and do it. They have other ways of claiming their insurance expenses in some scenarios.”
The small business tax breaks went into effect two years ago, but many of those businesses are still leaving money on the table that advocates say, could make coverage more affordable. Others say the credits aren’t enough to offset the cost of providing insurance.
