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Consumers Face Higher Obamacare Premiums, Penalties in 2017 by Adam Cohen, CPA


Posted on December 06, 2016 by Adam Cohen

November 1, 2016, marks the start of the fourth open enrollment period under the Affordable Care Act. From this date through January 31, 2017, consumers may sign up via Healthcare.gov or a state-run exchange to purchase minimal essential health insurance coverage for the entirety of 2017.

 

For 2017, consumers face a 22 to 25 percent increase in premiums from a significantly smaller pool of insurance providers offering, in some cases, fewer primary care physicians participating in their plans. However, according to the administration, more than nine in 10 people may qualify for an Advanced Premium Tax credit, which can make the cost of coverage more affordable. According to the U.S. Centers for Medicare and Medicaid Services, these subsidies, which are available to individuals with household income of up to $47,520 for individuals or $97,200 for a family of four, enable most Americans to find a Marketplace health insurance plan with premiums from $50 to $100 per month.

 

The penalty for failing to have health insurance is an individual shared responsibility payment, which in 2016 was the higher of 1) $695 per adult and $347.50 per child under 18 for a maximum penalty of $2,085 per family, or 2) a penalty equal to 2.5 percent of one’s annual household income above the tax filing threshold up to a maximum of the national average price of a Bronze plan sold through the Marketplace. The per-person penalty is expected to increase in 2017, making it more expensive for individuals to go without coverage.

 

Following are important options for individuals to consider in order to meet their shared responsibilities under the Affordable Care Act.

  1. Determine Eligibility for the Advanced Premium Tax Credit,
  2. Keep Dependents under 26 on Parents’ Plans,
  3. Shop Around. Even if a consumer is happy with the health insurance they paid for in 2016, it makes good financial sense to review that plan against others to identify potential cost savings next year. Additionally, consideration should be given to an individual’s unique medical issues and the possibility of paying more up-front in premiums for a lower deductible. Consumers who were enrolled in Obamacare in 2016 will be automatically reenrolled in the same plan in 2017 unless they select a new plan.
  4. Determine Eligibility for an Exemption. The ACA provides an exemption from the shared responsibility penalty when consumers can demonstrate that they meet any of the following conditions during the tax year:

 

Taxpayers should meet with their accountants before the open-enrollment period ends in order to meet their responsibilities under the Affordable Care Act and avoid unnecessary penalties.

The advisors and accountants with Berkowitz Pollack Brant’s Tax Services practices work with individuals and businesses of all sizes to understand and comply with the provisions of Affordable Care Act.

About the Author: Adam Cohen, CPA, is an associate director in the Tax Services practice of Berkowitz Pollack Brant, where he works with closely held businesses and non-profit charities, hospitals and family foundations to maintain tax efficiency and comply with federal and state regulations. He can be reached at the CPA firm’s Ft. Lauderdale office at (954) 712-7000 or via e-mail info@bpbcpa.com.