1. The Affordable Care Act
Taxes,
The Affordable Care Act
and You
December XX, 2014
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2. What We’ll Discuss Today
ACA Tax Impacts and You
Advance Premium Tax Credit
ACA Tax Penalty & Exemptions
Resources
Welcome to our presentation today. Thank you for joining me here.
My name is __________. I’m a [TITLE] and have been with H&R Block for [number of years] and am [talk briefly about your certifications].
Today, we’re going to talk about the Affordable Care Act and how it may impact your taxes – and potentially affect your refund this year.
Today we’ll go through:
How the ACA may affect your tax return this year
Talk about the Advance Premium Tax Credit – what it is and how it works
Talk about the ACA Tax Penalty, how it may affect you and what exemptions are available to you
And lastly, some helpful resources you can refer to after today
I expect this should be about an hour with lots of time for questions and answers at the end.
Before we get started I first wanted to ask you if there are any specific things you wanted to make sure I cover here today [open to audience, acknowledge questions and note that you’ll do your best to address in the presentation and if not, you will be happy to discuss afterwards too]
… great, let’s get started

3. ACA has created a new intersection between Health Care & Taxes
The ACA has created a new intersection between health care and taxes.
Why? Because 3 key elements are being administered through your tax return starting this year. They are:
Reporting if you and members of your household have qualified health insurance
Accounting for any Government financial assistance you received to help pay for your insurance through the state or federal insurance ‘marketplace’ [or say the name of your state marketplace, for example; Covered California]
Determining a penalty, or exemption, if you or a household member don’t have insurance
But what’s most important is to be aware IF YOUR taxes will be impacted. And that’s what we want to focus on today.
Health Care

4. ACA Tax Impacts
As part of the ACA, almost everyone is now required to have and maintain qualified health insurance coverage.
The first step in knowing if you will be affected is to know that as part of the Affordable Care Act, almost everyone in your household is now required to maintain qualified health insurance coverage.
There are two key words here I want to flag for you:
The first is “household” – It’s important to note that for purposes of ACA, only the people you can claim on your tax return are considered members of your household. That means, you, your spouse, your children, or other people you claim as dependents.

5. Not Qualified Coverage
What is “qualified” health insurance coverage?
Qualified Coverage
Not Qualified Coverage
Insurance through your job, COBRA or retirement plan
Student health insurance
Medicare, Medicaid, TRICARE or CHIP
Marketplace health insurance
Short-term medical coverage
Accident or disability only coverage
Dental and vision only plans
Travelers insurance
Medicare supplemental plans
The second key word is “qualified” health insurance:
When determining if you have health insurance that’s considered ‘qualified’ under the ACA, there are some types that won’t pass the test and are not considered qualified health coverage.
Those include: short term medical plans, accident or disability only coverage, dental and vision only plans, travelers insurance, and Medicare supplemental plans.
If you have insurance you receive through your job, COBRA, insurance that’s part of a retirement plan or coverage through government programs like Medicare, Medicaid, Tricare and CHIP and Marketplace health plans --- that’s all considered qualified and means you meet the requirement to have health insurance.

6. ACA Tax Implications
Now let’s get to the heart of the matter – the ways the Affordable Care Act may affect your tax return – and possibly affect your refund – this year.

7. Advance Premium Tax Credit ACA Tax Penalty and Exemptions
ACA Tax Impacts
Low Tax Impact
75% taxpayers
HIGH Tax Impact
25% taxpayers
Employer Insurance
Advance Premium Tax Credit
ACA Tax Penalty and Exemptions
There are 3 different categories that just about everyone – whether you have insurance or not – will fall under when it comes to the ACA this year. Each of these categories will have an effect on your tax return. They are:
You have insurance from your employer
You got insurance through the federal marketplace or state marketplace [just say the name of your state marketplace instead, e.g. “Covered California”] and you received the Advance Premium Tax Credit to help pay for your monthly premiums
You don’t have insurance and may have to pay the tax penalty
Today we’re going to really focus on numbers two and three as they will have the greatest impact on your tax return this year.
And for those people who fall into the first category because you have insurance through your employer it’s still good to know the implications as they may affect someone in your family.
So let’s walk through each of these now.

8. Employer Coverage This year = Self attest to having insurance
Low Tax Impact
75% taxpayers
This year =
Self attest to having insurance
Next year = Bring proof
Employer Insurance
Let’s start first with those of you who already have health care insurance through your employer.
This counts as ‘qualified’ health insurance under the Affordable Care Act and is the likely scenario for about 75% of all taxpayers.
This year you will need to ‘self-attest’ to having health care coverage so that you aren’t hit by any potential fees for not having insurance.
If you fall into this category, what’s important to know is that next year you’ll need to have proof to show you have insurance. If you have questions about that we can discuss more in the Q&A portion of today’s presentation.
Now let’s look at the two categories who will be the most affected this year. First up, those who received the Advance Premium tax credit.

9. Are you eligible ? Yes, if you…
What is the Advance Premium Tax Credit?
Are you eligible ? Yes, if you…
Enroll in a federal or state Marketplace health insurance plan
Household income falls within certain levels
Are a US citizen or have residency documentation
Don’t have or have access to affordable health insurance
Don’t qualify for programs like Medicaid/Medicare or have access to affordable employer-sponsored health insurance
So let’s talk first about the Advance Premium Tax Credit.
You may have heard this be called a subsidy but it’s actually a tax credit that the government provides to help give financial assistance to help lower the monthly cost of health insurance.
You can only get this credit if you applied for insurance through the federal or state Marketplace, like [name state marketplace if it’s relevant in your state. For example, if you’re in California just say “through the federal marketplace or Covered California”]
Your tax credit was estimated based on your household income and family size to determine how much of a credit you were eligible for
The Premium Tax Credit is sent directly to your health insurance company and applied to your monthly health insurance premium to lower the monthly cost.
You may be eligible for the credit if … [go through list on the slide]
If you don’t meet any of these criteria there are other forms of assistance that you can receive and won’t affect your tax return. Let me know if you’re interested in hearing more about this and we can discuss after the presentation.

10. Health Insurance Premium Cost Advance Premium Tax Credit
The Advance Premium Tax Credit
How It Works
Per Month
Estimated Annual
Household Income
Health Insurance Premium Cost
(before credit)
Advance Premium Tax Credit
(after credit)
Single
$25,000
$175
$104
$71
Married, Family of 4
$60,000
$533
$343
$190
When you enroll in a Marketplace health insurance plan, you are asked to provide an estimate of your household income.  This estimate, along with your family size, is used to determine your eligibility for the Advance Premium Tax Credit.  It’s also used to determine how much tax credit assistance you receive.   
After you enroll in a Marketplace health insurance plan and are determined eligible for the Tax Credit, this tax credit is typically ADVANCED to your health insurance company on your behalf and directly applied to your monthly health insurance premium, to lower your monthly cost. This occurs throughout the year.

11. How the Advance Premium Tax Credit may impact your tax refund
IF YOU GET AN ADVANCE PREMIUM TAX CREDIT…
YOU MUST RECONCILE YOUR CREDIT…
WHICH MAY RESULT IN…
If your actual household income was higher than you estimated, you may need to repay some or all of the credit you received.
If you estimated your household income correctly, you will not have to repay any of the credit you received.
If your actual household income was lower than you estimated, you may get money credited to your return when you file.
If you and/or a member of your household received the Advance Premium Tax Credit, you must file a tax return so that the credit can be reconciled.
When we talk about reconciliation what we mean is that the amount of the credit you received – which was based on your estimated annual income – will be compared against what credit you’re eligible for based on your actual income. There are two key ways this could affect you:
If your actual household income was HIGHER than you estimated – you may have to pay back some or all of the credit you received – up to the maximum repayment cap amount. This will likely reduce the amount of your tax refund, or add to your taxes due.
If your actual household income was LOWER than you estimated – you may get money credited to your return.
Let’s look at a more detailed example.

12. Dan & Lucy 2014 Estimated 2014 Actual Income $38,000
ACA Tax credit $2,800
2014 Actual
Income $50,000
ACA Tax credit $1,500
Tax refund
(-$1,300)
Meet Dan and Lucy. Dan is currently the sole household earner and works for a small employer that doesn’t provide health insurance.
Last January, when Dan heard about the new health insurance Marketplace he applied for the Advance Premium Tax Credit through the Marketplace to help pay for his insurance and estimated his household income would be $38,000 because that’s what he made the year before in 2013.
Based on his estimated income, they were eligible to receive the Advance Premium Tax Credit in the amount of $233 a month to lower their monthly health insurance cost.
In April, Lucy started a part-time job.
Now, Let’s fast forward to January 2015.
Because they enrolled in a Marketplace health plan, they receive the 1095-A form, which indicates that they received a $2,800 Advance Premium Tax Credit in 2014.
Originally, Dan estimated their household income for 2014 would be $38,000. However, since Lucy got a part-time job, their actual household income was $50,000 in 2014.
Because their household income was higher than expected, they were actually only eligible for an Advance Premium Tax Credit of $1,500 in 2014.
But they received $2,800.
They will have to pay the government back $1,300 for the excess tax credit, which will now be taken out of their refund.
There are a few things you can do to make sure that you’re accurately estimating your income if you take the Advance Premium Tax Credit – and so that it won’t impact your refund next year:
Estimate your household income as accurately as possible – you can use your AGI listed on prior year’s tax return
Make sure to include income from all members of your household who have income above the filing threshold
Make sure to notify the Marketplace if you have any changes to your household income or composition (you get a raise, your husband who was unemployed gets a new job, etc.)

13. We can not complete your return without it!
The Advance Premium Tax Credit
Form 1095A
Don’t forget to bring the new 1095-A form issued by the Marketplace to your tax appointment.
We can not complete your return without it!
If you or a member of your household received the Advance Premium Tax Credit, you will receive the new form 1095-A from the Marketplace.
Don’t forget to bring this form to your tax appointment. We can not complete your tax return without the 1095-A form. It should be mailed to you by the Marketplace by the end of January. If you don’t receive it, you should be able to access a copy through your Marketplace account or by contacting the Marketplace.

14. Penalties and Exemptions
Now that we’ve talked about the first two ways the ACA could affect your tax return this year, let’s talk about the third category.
This applies to anyone who did not have health care insurance in 2014 and may now face a penalty that will be applied through your tax return.

15. What is the ACA Tax Penalty?
$95 per adult OR
1% of taxable household income (minus the minimum filing amount)
Whichever amount is greater!
You may have heard that the penalty the first year is “just $95.”
That’s only partially true.
It’s actually whichever amount is greater: $95 per adult member of your household ($47.50 for dependents under 18) OR 1% of household taxable income less the minimum filing amount.

16. Greater of the two = ACA Tax Penalty!
Vicki and Ray
Married Couple with
Household Income of $65,000
1 x $95 = $95 OR
1% x ($65,000 –$20,300) = $447
So, what does this look like? Here’s another example:
Ray is an independent contractor and is currently uninsured but his spouse Vicki is covered under her employer’s plan.
Together their household income is about $65,000 and they file jointly.
Even though Ray knows about the potential fee related to not having health insurance, he thinks that at most it will only cost him $95.
When Ray and Vicki go to file their taxes, they find that Ray does not qualify for any exemptions. They will have to pay the ACA Tax Penalty.
Ray learns that his penalty will be $447, not $95, because $447 is 1% of his income, minus the minimum filing amount
The fee will be deducted from their tax refund.
Next year if Ray continues to be uninsured, their tax penalty may double to almost $900.
Greater of the two = ACA Tax Penalty!

17. ACA Tax Penalties will increase
2015
$95 or 1%
2016
$325 or 2%
2017
$695 or 2.5%
Tax filing year:
It’s important to know that the ACA Tax penalty is scheduled to increase over the next 2 years.
In 2015 the tax penalty will increase to $325 per adult or 2% of household income which will hit when you go to pay your taxes in 2016.
And by 2016 the tax penalty will be $695 per adult or 2.5% of household income. This will affect you when you pay your taxes in 2017.

18. Do you qualify for an exemption?
Claimed on the Tax Return
Household income is below filing threshold
Three month or less gap in health coverage for 2014
Granted by Marketplace
Unpaid medical expenses
Caring for an ill, disabled or aging family member
The good news is that many people may qualify for an exemption to reduce or eliminate their ACA Tax Penalty. In fact there are more than 30 exemptions you can apply for that fall into two categories:
Exemptions you claim on your tax return like:
If you had health insurance coverage by May 1, 2014,
If you’re a non-U.S. citizens without valid immigration documentation
Or for those whose household income is below the minimum filing amount
And there are many other options available that may apply to your situation
There are also exemptions that are granted by the Health Insurance Marketplace. You may be eligible for these if you are:
A member of a religious sect with objections to insurance and those who have experienced a hardship in 2014
Or if you meet one of the 15 hardship exemption criteria. Some of those include those who experienced homelessness, eviction, foreclosure, bankruptcy, or those who were denied Medicaid and live in a current no-expanded Medicaid state
You can find a full list of exemptions on our website: HRBlock.com/ACATaxImpact
H&R Block can help you determine which exemptions you may qualify for as well as filing the proper paperwork with the IRS.

19. Marketplace Exemption
Trisha
$25,000 annual Income
No insurance
$190 tax penalty
Marketplace Exemption
Let’s look at an example of where an exemption might apply.
Trisha is a single mother who can claim two children as dependents. Neither she nor her two children had health insurance coverage in 2014
Trisha’s annual household income is $25,000 but she still feels she cannot afford health coverage even though she is eligible for the Advance Premium Tax Credit.
Trisha went through tough economic times this past year and was evicted from her rental apartment. She and her children are currently living with friends until she can get back on her feet.
When Trisha goes to file her 2014 taxes, she learns that she may face a potential ACA Tax penalty of $190.
However, Trisha’s ACA Tax Specialist finds that because Trisha suffered an economic hardship, she may qualify for an exemption granted by the Health Insurance Marketplace, which may eliminate her tax penalty. Trisha will need to apply for the exemption through the Marketplace.
In this instance we would be able to help you identify what kind of exemption you’re eligible for and walk through the process of claiming the exemption as well.
The best way to make sure you don’t have to deal with the ACA fine is to make sure you’re enrolled in a qualified health insurance plan for all 12 months of the year

20. Advance Premium Tax Credit ACA Tax Penalty and Exemptions
ACA Tax Impacts
Low Tax Impact
75% taxpayers
HIGH Tax Impact
25% taxpayers
Employer Insurance
Advance Premium Tax Credit
ACA Tax Penalty and Exemptions
To recap – there are a lot of changes to this year’s tax code as a result of the Affordable Care Act, but what’s most important is to be aware IF YOUR taxes will be impacted.
Remember if you fall into one of the 3 categories that we just discussed, your tax return will be very different this year especially if:
You got insurance through the federal marketplace or state marketplace [just say the name of your state marketplace instead, e.g. “Covered California”] and you received the Advance Premium Tax Credit to help pay for your monthly premiums
You don’t have insurance and may have to pay the tax penalty
And if you have insurance from your employer, the impact might be lower but it’s still a good idea to understand these scenarios in case someone in your family is affected

21. Final Tips & Resources
Before I open for some Q&A there are two resources I wanted to let you know about:

22. First – on Thursday January 8 we are having a 12-hour ACA Q&A Day event.
H&R Block offices nationwide will be open for 12 hours straight – from 9 a.m. to 9 p.m. – so you can come in and speak to one of our ACA Specialists to be sure you understand the new tax changes, and so that no stone is left unturned and your 2014 taxes are filed  accurately.
We’ll provide a free H&R Block ACA Tax Impact Analysis – your personalized review of how your taxes may be affected by the Affordable Care Act. No charge and no appointment necessary.
So if there’s anything I didn’t cover here or if you have more questions you want to ask someone about your individual situation, this is a great time to come by.

23. Licensed Health Care Advisors are available by phone.
H&R Block can help you enroll in health insurance
FREE access to trained, certified and licensed Health Care Advisors
UNBIASED health plan comparisons, selection, advice and enrollment
HELP applying for the Advance Premium Tax Credit to lower the cost of health insurance
Licensed Health Care Advisors are available by phone.
The second resource is our enrollment support.
Our health care advisors can help you find and enroll in a Marketplace health plan that best fits your needs and budget, as well as help you apply for the Advance Premium Tax Credit to lower the cost of your monthly health insurance premiums, for free.
You can also visit our health insurance website at healthcare.hrblock.com to estimate your advance premium tax credit and view plan options in your area.
And you can feel free to reach me at [local information – or note that your business cards are available after the presentation]
Call HR BLOCK
or visit us online at healthcare.hrblock.com

24. Questions?

25. Thank you.
I’ll be at the back of the room to answer any additional questions you have, and if you’d like, I can set you up with an appointment.