Wednesday, January 21, 2015
Kaiser Health News
January 21, 2015
Tax Preparers Brace To Be Bearers Of Bad Health Law News
By April Dembosky, KQED and Jeff Cohen, WNPR
IRS Commissioner John Koskinen declared this tax season one of the most
complicated ever, and tax preparers from coast to coast are trying to
get ready for the first year that the Affordable Care Act will show up
on your tax form.
The penalty for being uninsured in 2014 is $95 or 1 percent of income,
whichever is greater. Next year, it's 2 percent. (Sue Ellen Smith of H&R
Block in San Francisco) says the smartest move for people to avoid those
penalties is to sign up for insurance before Feb. 15, the end of the
health law's open enrollment period.
But a lot of people may not think about this until they file their taxes
in April. For them, it will be too late to sign up for health insurance
and too late to do anything about next year's penalty too, says Mark
Steber, chief tax officer for Jackson Hewitt Tax Services.
HealthCare.gov: Fees and Exemptions
Comment by Don McCanne
Many of those who decided to pay the $95 penalty instead of being
insured in 2014 may be surprised to learn at tax time that the penalty
at their income level is 1 percent of income over the tax filing
threshold - roughly $300 for an individual with a $40,000 income. If
they wait until April to file their taxes and still don't have
insurance, open enrollment for 2015 will have already ended and their
penalty increases to 2 percent. A double surprise.
Actually it is much more complex than this. The link for "Fees and
Exemptions," above, describes other considerations such as what
constitutes minimum essential coverage, numerous exemptions from the
requirement to pay the penalty, specific hardship exemptions, the
various application processes for exemptions, instructions on paying the
"shared responsibility" penalty, and so forth.
This is only one of the multitude of unnecessary administrative
complexities introduced by the Affordable Care Act, layered on top of
the most administratively complex system in the world. Had we enacted a
single payer national health program, we would have had a dramatic
reduction in this administrative waste, with a recent study
demonstrating that we could save about $375 billion simply by addressing
our excessive billing and insurance-related functions. This doesn't
include the savings that we would realize by eliminating much of the
other administrative excesses such as the one described here.
It's never too late. We can still make the change to single payer.
at 3:54 PM