Some Americans will be in for a surprise. Despite massive publicity about the Affordable Care Act (Obamacare) and the impact it will have on individuals, some people do not pay much attention and may be in for a surprise.
There will be substantial financial penalties for those who do not have health insurance. The Internal Revenue Service will be handing out the penalties starting in 2016. There is a February 15, 2015 deadline to buy insurance. If a person does not have health insurance by that date, those without coverage could be hit with fines of $325 per adult or two percent of family income, whichever is higher.
Most federal employees have health insurance. The Federal Employees Health Benefits Program (FEHB) provides health insurance with a wide range of health insurance options and with substantial contributions from the federal government to reduce the cost of the insurance. As an example, the total monthly cost of the standard Blue Cross and Blue Shield Service Benefit Plan for a family is $1,434.07 per month. The share paid by the employee is $462.17.
Impact on Federal Employees
How do federal employees with insurance under the FEHB ensure they are not fined?
Blue Cross has sent out a notice to all members noting that the company will send out a statement to each policyholder that lists the individuals who have coverage under your health insurance contract. This statement will prove that you have health insurance under a Blue Cross plan. In addition, the company is required to report information on each member to the Internal Revenue Service (IRS). The company will provide the following information to the IRS:
- Your name, address and tax identification number (TIN) if you are the person who is insured.
- The name and TIN of each dependent covered under your policy.
- For each member covered, the months each person has been enrolled in the plan.
- The name, address and employer identification number (EIN) of the agency that sponsors your health insurance coverage.
Each policy holder will be receiving a letter to verify that the information to be provided to the IRS is correct. You will also be asked to provide any additional information that is not on file and which will then be added to the information maintained by Blue Cross and forwarded to the IRS.
For those who do not like providing this much personal information to the health insurance company and to the tax collecting agency of the federal government, keep this in mind: If you do not provide the information, you could be charged $50 by the IRS for failing to provide the information to the health insurance company. And, of course, failing to provide the information could result in having to pay a fine (or paying another tax if you prefer to use that term) of $325 per adult or two percent of your family income, whichever is higher.
