5 Ways the Affordable Care Act Affects Your Wallet

We sift through the dense text to tell you what the ACA means for your family and your money

While the web and the world are all abuzz about the historical ruling the Supreme Court handed down today in support of President Obama’s Affordable Care Act, you might be wondering exactly how it affects you and your money.  Well, the full Affordable Care Act document (hundreds of pages) is here, but we’ll sift through the dense text and outline five key points:

1. Non-compliance penalty. Most Americans will be required to obtain qualifying health coverage by 2014 or face a penalty.  The charge will gradually rise over a three-year period. In 2014, the cost will be $285 per family or 1% of household income (whichever is greater). Individual adults will pay $95. The following year, in 2015, the fee will be $975 per family or 2% of household income (whichever is greater). Individual adults will pay $325. By 2016, the cost will rise to $2,085 or 2.5% of household income (whichever is greater).  Individual adults will pay $695. The penalty must be paid to the IRS along with your taxes.

2. Health insurance tax credits. Starting January 2014, if your household income is less than $88,000 for a family of four, and your job doesn’t provide coverage you can afford, you are eligible to receive tax credits to assist you with paying for insurance. An advance payment can be made to your insurance company to help cover the cost of premiums.

3. Health insurance exchange program. Starting January 2014, if your employer does not offer health insurance, you can buy it directly from an Affordable Insurance Exchange. Both small businesses and individuals will be able to participate in this new insurance marketplace. The exchange allows consumers to enroll in a private or public health insurance plan, compare insurance benefit packages to get the best deal, and determine eligibility for tax credits.

4. Increased income tax for high earners. Starting January 2013, if you’re a very high earner you might be hit with higher income taxes. There will be a 3.8% surtax on investment income earned in households earning $200,000 or more for individuals and $250,000 or more for couples.

5. Home sales tax. In addition, if capital gains on the sale of one’s primary home is more than $250,000 for an individual or $500,000 for a couple, and income requirements are met,  the realized gain will be taxed at 3.8%. The rise in fees will help with paying for the cost of healthcare.

For more information on the Affordable Care Act, log on to HealthCare.gov.

ACROSS THE WEB
  • Joyce Helm

    Quite informative.

  • http://twitter.com/harlemmania harlem mania

    kinda like a zwirn/greenwich street deal

  • RunnettG

    This is one of the best coverage on the ACA. It’s informative without all the technical mumbo jumbo terms. Some might call this socialism but I see as a hug step towards becoming what America claims to be.

  • Vince P.

    As a businessowner how does this save my business money on insurance for my employees? How does it decrease my medical expenses when hospitalized?
    I’m for the Affordable Healthcare Act (Obama Care).

  • Vince P.

    As a businessowner how does this save my business money on insurance for my employees? How does it decrease my medical expenses when hospitalized?
    I’m for the Affordable Healthcare Act (Obama Care).

  • Rita

    Each of these five components of the ACA appear to me to be fair and equitable. Now thats American.

  • LDB

    Whoa! Wait a minute. I think that noncompliance is unfair. Why would they want to penalize people for not having insurance? There are a lot of unemployed people out there who have not been able to find work in a few years. There are also a lot of underemployed people. Many of these people have heavy obligations and may not be able to afford to pay extra money for health insurance. In my case, I wanted to add my husband who is unemployed to my plan because he doesn’t have it but was told that I couldn’t. I have to wait until my job offers open enrollment next year. We can’t afford to pay for another health plan. Why doesn’t Obama try to institute some type of universal insurance instead?