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Tax help comes with health insurance advice

Derrick Bean filed his income taxes at an H&R Block office in Los Angeles this month, and the 26-year-old left with something unexpected: a price quote on federally subsidized health insurance.

Using the information from his 2012 return, a tax adviser told him that he would qualify for significant government help and pay only about $65 a month in premiums under the federal health care law. If he skips coverage, H&R Block warned him, he faces a $95 tax penalty next year and $356 the following year.

"I was surprised to hear all that," Bean said. "It's good to finally see some concrete evidence that this is happening."

As tax season kicks into high gear across the country, millions of Americans are getting their first taste of the biggest change to health insurance in nearly half a century. Many of the changes in President Obama's Affordable Care Act take effect in January, when most Americans will be required to buy coverage or incur a penalty.

The individual effects and consequences of the nation's health care overhaul in 2014 are far from certain, but insurance companies, tax consultants and other financial planners are starting to offer cost estimates for next year and describe the penalties for inaction.

For many consumers, their 2012 tax returns will offer some of the first clues on what financial aid may be available and what coverage may cost.

The Internal Revenue Service and state insurance exchanges will rely primarily on 2012 federal tax returns, officials say, to verify people's income and household size and to help determine what premium subsidies are available. By October, state exchanges are slated to open for enrollment and allow comparison-shopping of health plans.

Nationwide, H&R Block officials are urging customers who have existing health coverage to examine the estimated cost of subsidized insurance through the new exchange since they may be paying more for their employer plan.

Tax help comes with health insurance advice 02/24/13 [Last modified: Sunday, February 24, 2013 9:31pm]
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