Health Insurance & Taxes: What You Need to Understand

​If you already have health insurance, you’re already reaping the “peace of mind” benefits. Along with that, you won’t also be required to pay for penalties when you file your taxes. But what if you’ve only had coverage for several months in a year? Or you received financial aid from the government to reduce your monthly payments? Here are some things you should know about health insurance and taxes.

​What is an individual mandate?

The individual mandate, otherwise known as individual shared responsibility provision, requires everyone who has the means the get health insurance to purchase coverage or pay a tax penalty. If you can afford to buy coverage and yet you choose not to get one, the penalty will apply unless you’re eligible for an exemption.

If you’ve only had coverage for nine months, you may pay the tax penalty. If you’ve been exempted before, or you want to apply for one when filing taxes, you need to file Form 8965.

What are the qualifications for health coverage exemption?

You can be eligible for an exemption if:

• You are experiencing hardship.
• You have an income below the level that requires the filing of tax return.
• You are living abroad.

What if you have coverage through employment?

According to the IRS, those who have health insurance through employment will simply have to indicate that they have coverage. No additional forms required to be submitted.

Is financial assistance from the marketplace considered income?

IRS says that the financial aid you received from the government will not be counted as income. It is, however, a premium tax credit that will help reduce your monthly premiums.

Health insurance will definitely give you peace of mind. But that will only happen if you know your taxes well. To avoid inconvenience, you should know the process of filing your taxes to the IRS. You can ask your agent about it or better yet contact the IRS.

For those who are not eligible for the exemption, Choice Enrollment offers affordable and reliable health insurance policies that would suit your needs. Talk to Ron and get a free health insurance quote from us. Call us at (719) 481-1616 or visit us at our office today.