Some important things you may want to know about the Affordable Care Act (Obamacare) and TAXES for 2015
This law is changing constantly and most of us need to be aware of the changes as they occur, how they affect us, our businesses and our clients.
- Many individuals are receiving premium tax credits (subsidies) to purchase individual health insurance at a discount.
- People who do not have health insurance & pay taxes will be fined $325 or 2 % of household income whichever is greater in 2015. By 2016, the average fine will be $1,100.
- Many small businesses are canceling their group insurance plans and asking their employees to purchase individual policies, which cost much less in some cases. In many cases the employee with a modest income may be eligible for a subsidy. Please give me a call to discuss this at 410-484-2544.
- If the business helps the employees with the cost of these plans, the expense is not tax deductible to the business. The penalty for taking this deduction is huge. Therefore it ultimately may not pay to drop the group plan.
- The business can, of course increase employees’ salaries to cover this expense, but it does create additional payroll taxes for the business and also income tax on the employee’s side.
Health Savings Account
- The business can help the employees financially, if the plans purchased are HSA (Health Savings Account) qualified plans.
- An HSA account can be opened at most banks, and the business can contribute up to the government allowed amounts. This money is tax deductible to the business and not income to the employee.
- The money in this account can be used to pay medical expenses toward the deductible and in addition can pay other medical expenses like, glasses, dental care, Long Term Care Insurance premiums & other medical expenses and they become tax deductible.
If you would like more info on the above, please give me a call.
Ed Kafes, RHU, CLTC
Interstate Health Underwriters
A trusted source for health insurance