SOURCE: Stride Health

Stride Health

March 01, 2016 08:00 ET

Stride Health Busts Myths, Misconceptions Surrounding Affordable Care Act and Taxes

SAN FRANCISCO, CA--(Marketwired - Mar 1, 2016) - Stride Health, the company redefining the way independent working Americans access health care and coverage, today shared a number of pointers aimed at dispelling confusion around the tax implications of the Affordable Care Act (ACA). At the heart of the ACA is the "individual mandate," which requires Americans to buy health insurance or else be fined.

"The ins and outs of health care coverage can be bewildering, and many people don't understand the health insurance tax penalty," said Noah Lang, CEO and co-founder of Stride Health. "When you add the possibility of a hit to the wallet, independent workers need comprehensible facts -- and we're happy to clear up any misconceptions."

The Tax Penalty

The most common questions received by Stride Health this time of year are about the tax penalty: If I'm only uninsured for a short time, will I be penalized? Will I be fined if I lose my job and, with it, my insurance benefits?

The ACA gives uninsured people time to find a policy. You are only penalized if you go more than three months without coverage. If you bought insurance for the 2016 year that begins on March 1, you do not have to pay the penalty. Similarly, if you lose job-based coverage in the middle of June, for example, and your new coverage does not begin until August 1, you are not penalized.

Last year, the tax penalty for 2015 was the larger of either $325 per adult or 2 percent of family income. In 2016, the penalty grows to a minimum of $695 per adult or 2.5 percent of family income.

However, uninsured Americans only pay the percentage of the penalty that corresponds to the amount of the year they went without coverage. So if a person does not have coverage for six months (half of the year) then they would pay half of the penalty.

There is the possibility of an uninsured person not having to pay the penalty, but it involves a specific set of circumstances. For example, if you live in a state where Medicaid did not expand, but you make too little to qualify for a government subsidy, you will not be fined on your taxes.

Deductions for the Self-Employed

There are also opportunities for independent workers to save money with health-related tax deductions. Many Americans may not be aware they can deduct their health insurance premiums from Adjusted Gross Income (AGI). The self-employed health insurance write-off is on page 1 of Form 1040, which means there's no need to itemize deductions to take advantage of this tax break. If you were enrolled in an employer-sponsored plan for any part of the year, you may only take premium deductions for the part of the year you were self-employed.

Medical Expenses

Medical expenses also may be deducted, Stride Health notes, if they exceed 10 percent of your AGI. Qualified medical expenses include care, surgeries, dental, vision, prescription medication, appliances (such as contacts, glasses and hearing aids) and travel expenses to obtain medical care.

Health Savings Accounts

Finally, it's possible to save money for future health care expenses in a tax-advantaged way. Insured Americans can put money into a Health Savings Account (HSA) for tax-free health care savings. The maximum contribution in 2016 is $3,350 for an individual. Unused money in an HSA rolls over year-to-year, so you can use it later, which is especially helpful with large and unforeseen medical bills. And if you're 55 or older, you can contribute an additional $1,000 "catch-up" amount each year.

Only those with High Deductible Health Plans (defined in 2016 as having a minimum deductible of $1,300 and out-of-pocket maximum of $6,550) are eligible to contribute to an HSA. Check your plan today and see if you can start saving for healthcare tax-free with an HSA.

ABOUT STRIDE HEALTH

Stride Health's hassle-free, user-friendly approach to healthcare and tax compliance helps independent contractors and self-employed Americans save time, reduce stress and tap into savings. The company recently raised $13 million in funding led by Venrock. Other investors include NEA, Fidelity Biosciences, The Mayo Clinic and Rock Health. The company also works closely with a handful of on-demand economy companies and freelance workforces to cover their contractors, including Uber, Etsy and Intuit. More information at www.stridehealth.com

Contact Information

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