Health News
The IRS issued a final regulations on when an employer-sponsored plan is considered "affordable" for an individual related to the employee for purposes of eligibility for a premium tax credit. Under Health Care Reform, employees may be eligible for a premium tax credit to purchase health insurance through the future health insurance exchanges if, among other reasons, the employer plan is deemed unaffordable.
The final regulations clarify that for taxable years beginning before January 1, 2015, an eligible employer-sponsored plan is affordable for related individuals if the portion of the annual premium the employee must pay for self-only coverage does not exceed 9.5% of the taxpayer's household income.
An employer plan will be affordable for family members if the cost of self-only coverage does not exceed 9.5% of the employee's household income. In other words, for purposes of whether family members are eligible for tax credits, the affordability of family coverage is not taken into account; all that matters is that the cost of self-only coverage is affordable to the employee
For purposes of applying the affordability exemption from the individual mandate in the case of related individuals, the required contribution is based on the premium the employee would pay for employer-sponsored family coverage.
For an employee eligible under an employer plan, affordability (for individual mandate exemption purposes) will be based on whether the cost of self-only coverage exceeds 8% of the employee's household income. For a related individual (such as a spouse or child), however, affordability for this purpose will be based on whether the cost of family coverage exceeds 8% of household income. Under these rules, members of an employee's family may qualify for an individual mandate exemption, even though the offer of affordable employer coverage to the employee would require the employee to enroll or risk paying a penalty.
These final regulations apply to taxable years ending after December 31, 2013.
For a copy of the final regulations, please click here.
This post originally appeared on February 5, 2013, on the Robert Slayton & Associates, Inc. blog. By Larry Grudzien, Attorney-At-Law
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Health News
IRS Issues Guidance on Health Insurance Premium Tax Credit - Clarification
The IRS issued a final regulations on when an employer-sponsored plan is considered "affordable" for an individual related to the employee for purposes of eligibility for a premium tax credit. Under Health Care Reform, employees may be eligible for a premium tax credit to purchase health insurance through the future health insurance exchanges if, among other reasons, the employer plan is deemed unaffordable.
The final regulations clarify that for taxable years beginning before January 1, 2015, an eligible employer-sponsored plan is affordable for related individuals if the portion of the annual premium the employee must pay for self-only coverage does not exceed 9.5% of the taxpayer's household income.
An employer plan will be affordable for family members if the cost of self-only coverage does not exceed 9.5% of the employee's household income. In other words, for purposes of whether family members are eligible for tax credits, the affordability of family coverage is not taken into account; all that matters is that the cost of self-only coverage is affordable to the employee
For purposes of applying the affordability exemption from the individual mandate in the case of related individuals, the required contribution is based on the premium the employee would pay for employer-sponsored family coverage.
For an employee eligible under an employer plan, affordability (for individual mandate exemption purposes) will be based on whether the cost of self-only coverage exceeds 8% of the employee's household income. For a related individual (such as a spouse or child), however, affordability for this purpose will be based on whether the cost of family coverage exceeds 8% of household income. Under these rules, members of an employee's family may qualify for an individual mandate exemption, even though the offer of affordable employer coverage to the employee would require the employee to enroll or risk paying a penalty.
These final regulations apply to taxable years ending after December 31, 2013.
For a copy of the final regulations, please click here.
This post originally appeared on February 5, 2013, on the Robert Slayton & Associates, Inc. blog. By Larry Grudzien, Attorney-At-Law
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Looking ahead to 2015, many employers are deciding how to respond to the rising cost of employee group health insurance premiums. A study of employers by the large consulting group Mercer suggests that ?the per-employee health benefit cost will rise by...
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There are at least 40 million immigrants in the United States, accounting for about 13% of our country?s total population. The Affordable Care Act (ACA, also known as ObamaCare) helps immigrants by providing new and strengthening current health insurance...
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Either as an individual or the owner of a small business, you may be affected by the Affordable Care Act tax provisions. The Affordable Care Act (also known as Obamacare) was signed into law by President Obama on March 23, 2010, and recently survived...
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