Category: Healthcare Tax Penalty
Healthcare Tax Penalty for Employers and Individuals
In 2014, President Obama’s healthcare overhaul will require nearly every U.S. citizen to carry health insurance or face a healthcare tax penalty. The goal, in part, is to keep medical costs downs by reducing the number of uninsured patients.
The question remains, however, how many people will be hit with the tax penalty. It’s estimated that roughly 6 million Americans – up nearly 50 percent from previous estimates – will incur a healthcare tax penalty by 2016.
Those 6 million people – mostly middle class – are just a sliver of the 150 million people who are currently insured by employers. Yet, experts expect households to be penalized the higher of $695 per person or 2.5 percent of household income in 2016. There are exceptions; people with financial hardships, religious objections, and some others are not required to carry the private health insurance.
Meanwhile, businesses are also required to offer employee health insurance or pay a healthcare tax penalty. That penalty can reach up to thousands of dollars per full-time employee.
Reactions to the mandate are mixed. Many small business owners, those with fewer than 25 full-time employees, are allowed a tax credit under the new overhaul. The tax credit gives businesses that pay at least 50 percent of their employee’s premiums to write off up to 35 percent of their contributions. In 2014, the tax credit increases to 50 percent. This allows small business owners to pool together and negotiate better rates with insurance companies. On the other hand, many other business owners said they would have to lay off employees to afford the coverage.
Learn more about how the healthcare tax penalty will affect you or your business by reading the latest from HealthReform.com. Stay informed by signing up for our newsletter today.
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The following is a brief (under 10 minutes) update prepared for Employees who are currently receiving the Federally mandated Exchange notices. Feel free to share.
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