Michigan Professional Nanny Association would like to thank Traci McGowan for her work in producing this article for us. For Michigan nannies who have further questions regarding their tax status or the Affordable Care Act, Traci is happy to answer questions. She is also happy to help with resolving tax issues (for a fair fee). We look forward to Traci's ongoing help and to having her as a featured workshop presenter at National Nanny Training Day 2014. Thank you, Traci!!
What
Does Obamacare Really Look Like?
By
Traci McGowan
I would be completely lying if I said I
understood all the babble the media has been presenting about Obamacare.
They’re just…arguing. While the big eared politicians fight with each other, I
thought I’d share what Obamacare could look like for those of you who belong to
the Michigan Professional Nanny Association.
Obamacare
is Law
The law does require practically
everyone in the country buy and/or be covered by a health insurance policy no
later than March 31, 2014.
Wait…Practically Everyone?
Yes. You may not be required to buy
health insurance if you:
· *
Have
financial hardships (you have to prove this).
·
*Have
been uninsured for less than three months (this could change).
·
*Have
religious objections (This does not mean
you can avoid the whole thing by saying “I’m religious!”).
·
*Are
an American Indian (If you fall under
this, you’ve most likely been contacted by your council).
· *Are
a prison inmate (Which would mean you would not be working as a Nanny).
·
*Are
an undocumented immigrant (Self-explanatory).
What
if I Don’t Qualify for an Exemption?
Here are a few suggestions:
*Mom
and Dad
·
Under age 26? You
could remain covered under your parent’s policy until you turn 26. Talk with
your parents about what staying on their policy would look like financially.
For those currently on their parents’ policies, it could mean no changes at
all. For others it may not make sense financially.
*Nanny Family (Employer) Helps with Premium Costs
· Household employers
are not required by the healthcare law to provide insurance coverage for
their household employees. However, healthcare.gov states that they could
qualify for health care tax credits if they do provide health insurance or at
least contribute towards your health insurance coverage.
·
The maximum
credit possible for the 2014 tax year for a small employer is 50 percent of
contributions made to qualified health care premiums/coverage.
·
The IRS still has
yet to explain the fine details for claiming the credit. Regardless, for your employer to qualify for the tax credits, the following guidelines must
be met:
o
You must be a
full time employee (aka: FTE).
o
Your income must
be reported. This means you receive a regular paycheck where taxes are
withheld, and you receive a W2.
o
Your annual
income must be less than $50,000.
o
Your employer must purchase health insurance through the Small Business Health
Options Program (aka: SHOP).
Your Nanny Family is not eligible for any credits and therefore cannot benefit
from assisting you with healthcare coverage.
Healthcare
Exchanges
Michigan does not have a State
healthcare exchange, so everyone must use healthcare.gov. You are not
able to shop for policies. You are required to offer up all your info.
Side note: you cannot go back and make
any changes to your profile. Nor can you create a new profile. What you see is
what you get.
Coverage
Explained
·
Bronze – it’s
called 60/40 – that means the insurance company will pick up 60% of the health
care costs and you will have to pick up the remaining 40%. AFTER you meet the
deductible. A deductible is what the policy holder has to pay out of their own
pocket before the insurance company
kicks in that 60%. This is how it looked for me:
o
Deductibles
ranged anywhere from $4,000 to $6,300.
o
Monthly premiums
ranged anywhere from $179 - $351 a month ($2,100 - $4,200 annually).
o
Annually (Premiums and Deductibles) potentially could
cost me $7,300 - $10,200.
·
Gold – it’s
called 80/20 – the insurance company picks up 80% of the health care costs and
you pick up the remaining 20%. Again, AFTER the deductible is met. This was my
breakdown (I only qualified for one Gold plan):
o
$250.00
deductible.
o
$379.00 monthly
premium ($4,500 annually).
o
Annually (Premiums and Deductibles) could run $4,800.
·
Silver – it’s
called 70/30 – the insurance company picks up 70% of the health care costs, you
pick up the remaining 30%. AFTER the deductible is met. This again, my
breakdown:
o
Deductibles
ranged from $1,650 to $4,600 per year.
o
Monthly premiums
ranged anywhere from $203 to $459 ($2,400 to $4,300).
o
Annually (Premiums and Deductibles) could run anywhere
from $4,700 to $7,300.
·
Platinum – it’s
called 90/10 – the insurance company picks up 90% of the health care costs and
you pick up the remaining 10%. AFTER the deductible is met. Me again:
o
Deductibles
ranged from $500-$1,000.
o
Monthly premiums
ranged from $265 - $430.
o
Annually (Premiums and Deductibles) could run anywhere
from $4,200 to $5,700.
What
About Those Government Subsidies – Won’t Those Help with the Premium Payments?
·
The only plan
eligible for subsidies and low-cost options are the Silver plans - that’s per
Healthcare.gov. Bronze, Gold and Platinum plans are not eligible for any out of
pocket savings regardless of how far down on the poverty calculator you are.
·
The “Subsidies”
come to you in the form of a tax credit when you file your 2014 taxes in 2015.
While the credit is a nice perk, it doesn’t provide any help on a month to
month basis.
·
Persons who do
not report income are not eligible for any subsidies. Please contact us for
additional information on this particular item.
What
If I Opt to Not Purchase Health Insurance
Persons who elect not to purchase health
insurance by March 31st, 2014 will have to pay penalties:
·
$95.00 per adult.
Married or have a partner? $190.00.
·
$47.50 per child.
Say you have three children? $142.50.
·
Penalty would be
$332.50.
OR
·
1% (one percent) of
your gross income, whichever is greater.
Each year the penalty increases. This
also does include any fees or interest the IRS may or may not charge.
About Traci:
Traci McGowan is a writer, an accountant
of 20 years, and Chief People Officer of By The Numb3rs, located in Royal Oak,
Michigan. When not crunching numbers or reading up in the latest IRS updates
over a bag of pretzels, Traci dreams of new AppleCrack toys. Traci is
also involved with the creation of a new exercise/fitness area at the S.A.Y.
clinic in Detroit, and is in the process of writing her first book.
