Final Rules On Penalties For Not Obtaining Health Insurance

The Internal Revenue Service has finalized penalties for individuals who do not obtain health insurance under healthcare reform.

Under the final rules, the shared responsibility payment for not maintaining essential coverage under the Patient Protection and Affordable Care Act is based on the greater of either a flat dollar amount or a percentage of household income over the taxpayer's applicable filing threshold.

The penalty for not obtaining coverage is $95 per person or 1 percent of household income in 2014 and jumps to $325 or 2 percent of income in 2015. In 2016, the IRS will fine nonexempt individuals without coverage either $695 or 2.5 percent of household income. After 2016, the penalty will be determined by a cost-of-living formula.

The Congressional Budget Office estimates less than 2 percent of Americans will forgo coverage and owe a shared responsibility payment, according to an IRS fact sheet released Wednesday.

Individuals have minimum essential coverage for a calendar month if they're enrolled in or covered by a health plan for at least one day during that month, according to the final rules. The IRS noted the one-day rule will ease administrative burdens for both taxpayers and the agency.

The IRS final rules do make some exceptions to the individual mandate. Those who will not have to make a shared responsibility payment include:

Individuals who cannot afford coverage;

Taxpayers with income below the filing threshold;

Members of Indian tribes;

Individuals who suffer hardship;

Individuals who experience short coverage gaps;

Members of religious sects or divisions;

Members of a healthcare sharing ministry;

Incarcerated individuals; and

Individuals who are not lawfully present.

"These rules will ease implementation and help ensure that the payment applies only to the limited group of taxpayers who choose to spend a substantial period of time without coverage despite having ready access to affordable coverage," the agency said in the fact sheet.

Contact Heather Matias Ainesworth for group quotes and other information relating to health care reform.

Genworth Reduces Term Rates

Effective September 3rd, Genworth will decrease rates for Colony Term 10, 15 and 20 by an average of 12% across all cells.

You can access a product fact sheet here.

Contact Steve Gresso for quotes and additional information

John Hancock Offers Needs Analysis Program

As part of Life Insurance Awareness month, John Hancock has released a new needs analysis program which is available to AMG partners on our Policy Assessment Page.   

Unlike other investment products, permanent life insurance is rarely reviewed to evaluate its performance. Declines in interest rates, changing insurance costs, and market conditions significantly affect your client's policy. Yet the impact of these changes is seldom explored or understood. These factors can cause significant increases in the cost of an insurance policy or, even worse, cause coverage to expire during the lifetime of the insured.

Expired life insurance is not a rare occurrence---it is a significant problem. If you don't review your client's policies as their trusted advisor, who will? Reviewing your client's policies may protect you from liability under the Uniform Prudent Investor Act or your state's fiduciary standards.

What is a Policy Assessment?

The Policy Assessment report is an objective third-party review of your client's existing life insurance coverage. This review is completed at no cost to your client.

Provide Your Clients with Peace of Mind

Our Policy Assessment is always in your client's best financial   interest and may conclude that no changes are necessary. If improvements are suggested, the Policy Assessment clearly explains how and why your client will benefit financially from   taking advantage of the recommendations.  Regardless of the outcome, providing a Policy Assessment assures your client that you have their best interests in mind.

Contact Steve Gresso for quotes and additional information