Health Insurance & Taxes

The deadline to file your 2018 personal tax return is this Monday, April 15th. With tax season in full swing, what better time than to discuss the connection between health insurance and taxes! Many people still aren’t clear on the connection, and we get why with all of the recent discussions and changes. You may have heard that the current government administration’s implementations ended penalties for not having health insurance or what is known as “minimum essential coverage”, but it is important to acknowledge this change does not take place until the 2019 plan year (for which you’ll file taxes in April 2020). (2018, Healthcare.Gov)

For plan years through 2018, to avoid the penalty for not having insurance you must have been enrolled in qualifying health coverage. For an insurance plan to meet the minimum essential coverage and qualify as coverage to avoid fees the plan must be certified by the Health Insurance Marketplace, provide essential health benefits, follow established limits on cost-sharing (like deductibles, copayments, and out-of-pocket maximum amounts), and meet other requirements under the Affordable Care Act. (2018, Healthcare.Gov)

It is important to understand that discount medical plans and products designed to help pay for medical services don’t qualify. If you chose only this kind of product, you may have to pay the fee for 2018 plans and earlier. Examples include:

  • Coverage only for vision care or dental care (2018, Healthcare.Gov)
  • Workers’ compensation(2018, Healthcare.Gov)
  • Coverage only for a specific disease or condition (2018, Healthcare.Gov)
  • Plans that offer only discounts on medical services (2018, Healthcare.Gov)

Below are examples of qualifying health coverage outlined by www.Healthcare.gov:

See a more detailed list of types of plans that do and don’t count as qualifying health coverage from the IRS. (2018, Healthcare.Gov)

For more information or to speak with a licensed insurance agent, give us a call at (800) 601-0543.


Reference:

https://www.healthcare.gov/fees/plans-that-count-as-coverage/

TurboTax. (n.d.). Health Care and Your Taxes: What’s the Connection? Retrieved April 12, 2019, from https://turbotax.intuit.com/tax-tips/health-care/health-care-and-your-taxes-whats-the-connection/L7ppfnMIr