An individual is an exempt individual for a month the last day of which is included in a short coverage gap. Except as provided in paragraph (e)(2)(ii) of this section, the required contribution percentage is 8 percent. https://turbo-tax.org/the-individual-shared-responsibility-payment-under/ Group health insurance coverage has the same meaning as in section 2791(b) of the Public Health Service Act (42 U.S.C. 300gg-91(b)(4)). The following examples illustrate the provisions of this paragraph (c)(2)(ii).
The proposed regulations provide that the term employee includes former employees and, as a result, treat coverage provided by an employer to former employees as coverage under an eligible employer-sponsored plan. Commentators noted that retiree coverage may be unlike coverage offered to current employees in terms of cost, scope of benefits, and enrollment opportunities and, therefore, should be treated differently from other employer-provided coverage. If an employee’s share of the premium for employer-provided coverage would cost the employee more than 9.5% of that employee’s annual household income, the coverage is not considered affordable for that employee. Under the safe harbors, an employer can avoid a payment if the cost of the coverage to the employee would not exceed 9.5% of the wages the employer pays the employee that year, as reported in Box 1 of Form W-2, or if the coverage satisfies either of two other design-based affordability safe harbors. If you have at least one full-time employee who receives a premium tax credit or cost-sharing reductions under the health plan that he or she is enrolled in through the state insurance exchange, the payment assessed depends on whether or not you offer health coverage. Employers with fewer than 50 FTEs are not subject to the shared responsibility (or “free rider”) provision that takes effect January 1, 2015.
However, November and December of 2016 are included in the continuous period that includes January 2017. The continuous period for 2017 is not less than 3 months and, therefore, January is not a part of a short coverage gap. A taxpayer is not required to file a Federal income tax return solely to claim the exemption described in this paragraph (f).
If a taxpayer has a household income below the applicable filing threshold and nevertheless files a Federal income tax return, the taxpayer may claim the exemption described in this paragraph (f) on the return. Family with some members enrolled in government-sponsored minimum essential coverage. The facts are the same as Example 3, except W and X enroll in CHIP coverage on January 1, 2016. Under paragraph (e)(4)(ii)(B), U, V, W, and X are members of U and V’s nonexempt family for 2016. Therefore, the annual premium for the applicable plan is the same as in Example 3 ($20,000). The maximum credit allowable under section 36B is also the same as in Example 3 ($9,055).
If you are not required to file a federal income tax return for a year because your gross income is below your return filing threshold, you are automatically exempt from the shared responsibility provision for that year and do not need to take any further action to secure an exemption. You do not need to file a return solely to report your coverage or to claim a coverage exemption. If you can check the box on Form 1040, you don’t need to file Form 8965. You should not make a shared responsibility payment if you are exempt from the coverage requirement because you have income below the filing threshold.
The applicable filing threshold for an individual who is properly claimed as a dependent by another taxpayer is equal to the other taxpayer’s applicable filing threshold. Plan in the individual market means health insurance coverage offered to individuals in the individual market within a state, other than short-term limited duration insurance within the meaning of section 2791(b)(5) of the Public Health Service Act (42 U.S.C. 300gg-91(b)(5)). The proposed regulations exclude certain government-provided health care programs from the definition of minimum essential coverage because they do not provide a comprehensive level of benefits. Similarly, certain limited benefit TRICARE programs do not provide a comprehensive level of benefits. It is anticipated that future regulations that will be effective starting in 2014 will provide that coverage under a limited benefit TRICARE program is not minimum essential coverage. However, the final regulations reserve on the status of these programs as minimum essential coverage.
Several commentators requested additional clarification concerning the treatment of a self-insured group health plan because these plans are not offered in a large or small group market within a state. The rule in the proposed regulations is revised to clarify that a self-insured group health plan is an eligible employer-sponsored plan, regardless of whether the plan could be offered in the large or small group market in a state. The Treasury Department and the IRS considered a rule requiring coverage for a majority of days in a month but chose the one-day rule because it provides administrative convenience for both taxpayers and the IRS.
The examples below are used only to represent the mechanics of calculating the payment and are not estimates of current or future health insurance premium costs. For information on the cost of bronze level plans, visit HealthCare.gov. Finally, the penalty will not be imposed if the applicable individual did not have coverage for a continuous period of three months or less. If there is more than one such continuous period in a calendar year, the exception provided will only apply to months in the first of those periods.
Section 5000A is effective for months beginning on or after January 1, 2014. Accordingly, the final regulations provide that gaps in coverage prior to January 1, 2014, are not taken into account when measuring the length of a coverage gap in 2014. To determine affordability of coverage, section 5000A(e)(1)(A) and the proposed regulations require taxpayers to increase household income by the portion of the required contribution made through a salary reduction arrangement and excluded from gross income. The preamble to the proposed regulations notes that the information necessary to make the required adjustment may not be readily available to the employee or the IRS and requests comments on practicable ways, if any, for making the adjustment. In the alternative, the commentator requested treating incarcerated individuals whose Medicaid benefits have been suspended as having minimum essential coverage. An individual incarcerated pending disposition of charges whose Medicaid benefits have been suspended remains enrolled in Medicaid, is entitled to receive benefits for healthcare provided outside the state prison system, and is not required to re-enroll in Medicaid at the end of incarceration.
If you or another member of your tax household is claiming a coverage exemption that didn’t cover every month of 2018 on your tax return, complete Part III of Form 8965. Here you are figuring out what the https://turbo-tax.org/ national average premium for a bronze plan ($204 a month for 2014) would be for the number of months your family went without coverage. The following examples illustrate the provisions of this section.