1095 forms are due to be mailed but February 1st. However, in 2015 many of the 1095 forms were mailed late and 800,000 tax payers received incorrect 1095’s.

Your 2016 1095 will be required to prepare you income tax return.

Penalty

The ACA penalty for not having compliant health insurance for 2016 and 2017 is calculated in 2 different ways. If you do not have a compliant Health Insurance plan you will pay the higher of the two calculations.

Percentage of Income

2.5% of household income (this includes any children living in your house and earning income)

The maximum is the national average price of a Bronze plan sold through the Marketplace.

Per Person Fee

$695/adult

$347.50/child under 18

Max: $2,085.00

Exemptions

There are exemptions to the ACA mandate which fall into several major categories. If you think that you may qualify for an exemption, please contact a health insurance professional or the health insurance exchange and they can assist you in applying for the exemption.

Penalty Collection

If you are required to pay the penalty for lack of qualifying medical insurance, then the fee is assessed on your income tax return. For the majority of tax payers this will be deducted from their income tax refunds. However, if you do owe tax, part of which is due to ACA penalty, please contact a tax professional for the options that you have to pay the penalty.

Employer requirement

Small Employer HI credit

If you are a small employer that pays for your employee’s health insurance, you may qualify for a tax credit. The requirements for the tax credit are:

You must have fewer than 25 full-time equivalents

Pay average of less than $52,000/year/FTE

Pay at least half of employee health insurance premiums

Your health insurance plan must have been purchased through the small business health options program or SHOP marketplace.

The credit can be as much as 50% of the premiums paid based on the total amount spent on premiums. If you feel that you qualify for this credit, please contact your accountant to discuss your options.