Business Owners Must Prepare for Healthcare Reform Open Enrollment Deadline or Face Penalties by Adam Cohen

Posted on February 06, 2014 by Adam Cohen

Individuals, including entrepreneurial business owners, who do not secure health insurance by the Affordable Care Act’s March 31 open-enrollment deadline, may face a 2014 penalty of $95 per uninsured adult or 1 percent of adjusted gross income, whichever is greater.

The IRS bases the income calculation for the “individual mandate penalty” on 1 percent of adjusted gross income that exceeds standard deductions and personal exemptions. For example, a married taxpayer, with one child, filing jointly with a modified adjusted gross income of $100,000, should expect to pay a penalty of $1,000, which will accrue interest and be deducted from the taxpayer’s 2014 refund. Taxpayers should also expect penalties to increase significantly with each subsequent year for which they are not properly covered.

Should a taxpayer miss the March 31 deadline, he or she will not be abler to secure health insurance again until the next open-enrollment period, which begins on Nov. 15.

To weigh the pros and cons of maintaining coverage versus paying a penalty, taxpayers should first consult with their accounting professionals who are well-versed in all of the nuances of the healthcare reform compliance requirements and how they apply to each taxpayer’s unique situation.

About the Author: Adam Cohen CPA is an associate director in the Tax Services practice of Berkowitz Pollack Brant. For additional information, call (954) 712-7000 or e-mail