health care — December 05, 2014

What the ACA Means For You

by Bobby Willover

Affordable Care Act

A new year is almost here, which means tax time can’t be far behind. And this year, we have the additional task of telling the IRS whether we complied with the Affordable Care Act (ACA). That might make your taxes seem a tad daunting – even more so than usual. Understand a few key issues, though, and things will look a lot clearer.

What’s the ACA?

Generally stated, The Patient Protection and Affordable Care Act – the ACA – says that most Americans have to carry health insurance. That can be through an employer’s plan, from government programs, or by coverage you bought yourself directly from the insurance companies.

The ACA takes a carrot-and-stick approach to getting more Americans insured. For those who need help buying coverage, the ACA provides subsidies in the form of a tax credit – the carrot. And if you don’t get insured, and aren’t exempt, you’ll face a penalty – the stick.

And to make coverage more uniformly findable, the ACA created the Health Insurance Marketplace – basically a website (or phone number) you can use to find and compare insurance plans. The Marketplace provides a “one-stop” shopping experience.

Minimum Essential Coverage

The ACA also established that the health insurance carried by individuals and families provide minimum essential coverage (MEC). MEC is simply a guideline for the level of care, protection, and the costs of coverage the health insurance plan must meet. Any insurance sold through the Marketplace meets minimum essential coverage – so if you buy there, you’re all set.

Premium Tax Credit

More about the carrot: The Premium Tax Credit allows those who qualify to get help to pay for their insurance. How much you get depends on your household income and family size. While there are several requirements to qualify for the credit, the biggest one is that you must purchase your insurance through the Marketplace.


There’s an important phrase when describing the ACA: “most Americans.” There are exemptions to who must be insured. These exemptions are based on a variety of factors, including economic means.

What does all this mean for me?

Since your compliance with the ACA is reported and reconciled on your tax return, you'll see a few more questions when you do your taxes this year. No worries, though: when you do your taxes with, we’ll walk you through the changes.

Also, check out's ACA infographic, which breaks down ACA coverage for you and your family.


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