Oct. 1 to Dec. 15. Remember those dates. That is when you can go to www.nevadahealthlink.com to enroll in health insurance for 2014 and, if you meet the requirements, get the new health insurance tax credit to assist you in purchasing health insurance.
How much credit could you get? Let’s go through an example: Family of four that lives in the Reno area that earns annual income of $47,100. Its Advance Premium Tax Credit (APTC) would amount to $752.72 a month, or $9,032.64 a year. That family’s out-of-pocket cost for health insurance after the credit? It’s $247.28 a month, or $2,967.36 a year.
So, what if that same family can’t even afford the $247.28 a month? The “penalty” (the U.S. Supreme Court says it’s a “tax” so that Obamacare is legal, but the law itself seems to call it a “penalty”) would amount to $52.67 a month or $632 a year in 2014 and jumps up to $173.75 a month or $2,085 a year in 2015 and beyond.
In summary, in 2014, our example family of four can purchase health insurance from the Nevada Health Insurance Exchange (the only way you get the credit) and pay $194.61 ($247.28 minus $52.67) a month more than the “penalty,” and in 2015 only pay $73.53 ($247.28 minus $173.75) a month more than the “penalty.”
If you own a business, how will this affect you? Starting in 2015, if you have fewer than 25 full-time-equivalent employees, and pay an average of less than $50,000 in annual wages per employee, if you purchase health insurance for your employees through the NHIE, you may be able to claim a tax credit of up to 50 percent of your cost to provide health insurance to your employees. (You don’t get the credit unless you purchase the health insurance through the NHIE.)
If you have more than 50 employees, things could get a bit more expensive. Say you offer single (not family) coverage, but it is too expensive (greater than 9.5 percent of an employee’s annual income) or it doesn’t meet the minimum requirements for essential coverage. For each of your employees who choose to purchase their health insurance themselves through the NHIE (and who gets an APTC), your penalty will be the lesser of $3,000 per qualifying employee or $2,000 multiplied by all FTEs minus 30. If you don’t offer health insurance coverage to any of your employees, the penalty will be $2,000 multiplied by all FTEs minus 30.
You could purchase health insurance (single, not family) through the NHIE and pay about $5,700 a year. If you have more than 50 FTEs and do not provide health insurance, you could be paying $2,000 and let the employee and the NHIE work out their health insurance privately. Alternately, if you have more than 50 FTEs and do provide health insurance that does not qualify, you will be paying at least $3,000 per employee who goes to the NHIE and gets an APTC.
Note: These are all pre-tax numbers. There are tax implications regarding deductibility, etc., that you will need to discuss with your CPA. This sounds confusing because it is!
Did you hear? “Sometimes you get, sometimes you get got, and sometimes you get both?”
Kelly Bullis is a certified public accountant in Carson City. Contact him at 775-882-4459, via BullisAndCo.com or on Facebook.