ACA, contracting and penalties

[jIMOh]

I am transitioning from working for a Mega Corp to contracting my skills.
Jan 1 2016 I will no longer have healthcare

I tend to contract my time for between $30-$75 per hour, and I have "never" not had health care. Dec 31 my current plan terminates and I will either need to pay some ACA tax, or get health care on my own.

To complicate matters, I live in Cincinnati Ohio, and will likely be working a contract in Detroit area or Buffalo area Feb 1.

Can someone explain the legal side of having health care (or choosing not to have it) and what penalties will be owed (for example if I am without health care for January, but have it rest of year, do I owe a penalty).

I am 42 yo and divorced
My kids are on their mothers policy
I am less familiar with Obamacare and the requirement to carry insurance (or pay a non insurance penalty). Anyone want to set me straight on their understandings of my options?

examples of what I read

Penalties for those without medical coverage: The penalty started at $95 or 1% of income (whichever is greater) per person in 2014. It gradually rises until it hits 2.5% or $695 (whichever is greater) per person in 2016.

The Affordable Care Act, requires that almost all U.S. citizens and legal residents (and their dependents) have health insurance for the entire year. This requirement started on January 1, 2014. There is a tax fee for not having health insurance during the year. There are very few exceptions to this requirement, so you may qualify for a tax payment exemption.

Who is Required to Have Health Insurance?

You must have have qualifying health insurance, qualify for an exemption, or make a payment for not having insurance when you file your tax return if you are one of the following:
A U.S. citizen OR
A non-U.S. citizen living in the United States.

How Will I Report My Health Insurance Coverage on My Tax Return?

If you have health insurance, you only have to check a box on your tax return (1040-EZ, 1040-A, or 1040) showing that you had health insurance for the year. When you prepare your tax return on efile.com, the software will ask you if you have health insurance, and once you answer "Yes," the software will automatically check the appropriate box on your return (so you don't have to!).
Though you cannot file 2015 tax returns yet, you can sign up for your 2015 tax return by click the button below. We'll send you an email letting you know when you can start preparing your 2015 return online!

What If I Don't (or Won't) Have Health Insurance?

If you can afford health insurance but choose not to buy it in any month during the Tax Year, generally you will need to pay a fee that is known as the individual shared responsibility payment when you file your Tax Return on efile.com. You might be able to obtain an exemption from the payment, but that is only for certain circumstances. The payment may cause your tax refund to be lower, or might result in higher taxes due on your tax return.

 

[bingybear]

try this one

Paying the fee

Using the percentage method, only the part of your household income that’s above the yearly tax filing threshold ($10,150 for individuals, $20,300 for couples filing jointly in 2014, the most recent year available) is counted.
Using the per-person method, you pay only for people in your household who don’t have insurance coverage.
If you have coverage for part of the year, the fee is 1/12 of the annual amount for each month you (or your tax dependents) don’t have coverage. If you’re uncovered only 1 or 2 months, you don’t have to pay the fee at all. Learn about the “short gap” exemption.
You pay the fee when you file your federal tax return for the year you don’t have coverage.

So if you are missing 1 or 2 months, there is an exemption for the fee.
That said, if your income is 0 for that month, you may be able to get medicaid. Or will you be getting a check for January (like for unused vacation?)

without insurance... hope you don't need healthcare

 

[jIMOh]

try this one


So if you are missing 1 or 2 months, there is an exemption for the fee.
That said, if your income is 0 for that month, you may be able to get medicaid. Or will you be getting a check for January (like for unused vacation?)

with not insurance... hope you don't need healthcare

On the contract I worked May-October, I negotiated a deferred payment structure which paid 22% of my pay when he received the payment from the customer- those commissions paid Oct 1, Nov 1 and Dec 1, so he took health insurance out of each check for me.

The contract I am working now (Nov 1-Feb 1) does not have health insurance. I have several good prospects, and know with a Detroit relocation I will find work quickly... the automotive industry needs PLM subject matter experts and pays in $60-$120/hr range so that works.

 

[Bamaman]

I had a son in law that owned his own business, and was very successful. He had a huge house with a pool and a 6 bay garage packed full of drag cars, ATV's and other toys. But he never purchased healthcare for himself, my daughter and their 3 children.

My granddaughter came up type 1 diabetic at age 11, and was in and out of the hospital for a few years. Her maintenance was extremely expensive @ $130 per bottle of insulin. She ended up with an enlarged heart, weak kidneys, scoliosis and died with stage 4 bone cancer at age 22. Poor healthcare under Medicaid was little help to her.

My daughter had heart valve problems, and suddenly had a fatal arrhythmia only to be revived about 9 minutes without air. She's very frail for being so young, and unable to work. And she's no longer the same person.

Our son in law was feeling bad, but Mr. Macho was too much of a he-man to pay for a doctor's visit. As time went on, he self medicated with pills and illegal drugs. By the time he found out that he had multiple myeloma, only a stem cell transplant would help. He died with amliadosis and a massive blood stream infection.

Having healthcare is part of being a responsible adult. You have the choice of the ACA and going to the open market with someone like Blue Cross/Blue Shield. If you go the ACA, you better get moving because enrollment closes Tuesday night.

Our daughter's family might have not disintegrated had they done without such materialism and chosen to invest in their health.

 

[rbmrtn]

Can someone explain the legal side of having health care (or choosing not to have it) and what penalties will be owed (for example if I am without health care for January, but have it rest of year, do I owe a penalty).

The FAQS at healthcare.gov will answer most of your questions. There is short term gap exemption

https://www.healthcare.gov/fees/

Open enrollment ends Jan 31, but for coverage to start Jan 1st you must enroll by Dec 15th

 

[Senator]

If you have a business, it will be a tax deduction. Be sure to set up your company so you can deduct it.

 

[jIMOh]

If you have a business, it will be a tax deduction. Be sure to set up your company so you can deduct it.

I usually contract through third party "staffing" firms which prevents me from doing this. I do have 3 LLCs I could run contract through, I have never invoiced so unsure of those details... bookkeeping is not my strong suit.

 

[aja8888]

I usually contract through third party "staffing" firms which prevents me from doing this. I do have 3 LLCs I could run contract through, I have never invoiced so unsure of those details... bookkeeping is not my strong suit.

If you are getting 1099's, you have a business.

If accounting is not your strong suit, it will be money well spent hiring a firm to handle it for you. There are lots of small accounting firms that cater to small businesses.

With respect to healthcare, we all get older and many of us actually get sick before we die.

 

[jIMOh]

If you are getting 1099's, you have a business.

If accounting is not your strong suit, it will be money well spent hiring a firm to handle it for you. There are lots of small accounting firms that cater to small businesses.

With respect to healthcare, we all get older and many of us actually get sick before we die.

I get a W-2 paycheck

 

[aja8888]

I get a W-2 paycheck

I'm surprised! You are an employee.

I contract also and receive 1099's.

 

[jIMOh]

I'm surprised! You are an employee.

I contract also and receive 1099's.

I contract- the employment entities are loosely defined staffing companies which offer no value to me, and a legal in between for the company I work for, the company I provide service too and the issue is many of these entities don't offer healthcare.

So I am looking into getting healthcare on my own
or only working for the contract houses which offer it (I can do this in Detroit, tougher to do in other places based on demand and volume).