The Health Care Act of 2010 covers a wide range of provisions relating to health care reform. Some were retroactive to 2009, while others don’t become effective until 2014. Several provisions, relating to “children” under the age of 27, became effective March 30, 2010.
Reimbursements of medical expenses under an employer-provided health plan for children under 27 are tax-free. This applies even if the child is not a dependent of the employee, and includes the value of health insurance coverage. Such reimbursement and coverage is excludable from income for children who have not reached age 27 as of the end of the employee’s tax year. A child includes a son, daughter, stepson, or stepdaughter (including legally adopted children).
Individuals may include the cost of health insurance premiums for children under 27 in the self-employed health insurance deduction on page 1 of Form 1040. Such premiums are deductible for children who have not reached age 27 as of the end of the tax year.
The Act also provides that group health plans, that include coverage for dependent children, make dependent coverage available to children under age 26. (This is not a typo. This provision has a different age limitation than do the others.) This provision is effective for plan years after September 30, 2010.
If you are interested in obtaining more information on the provisions of the Health Care Act, feel free to contact us.
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Blackman & Sloop is a full-service CPA firm headquartered in Chapel Hill, North Carolina and is actively involved in auditing, taxation, management consulting, financial planning, and related services. The firm directs a large part of its services toward providing management with advice on budgeting, forecasts, projections, financing decisions, financial analysis, and tax developments. The firm also performs review and compilation services and prepares not-for-profit, corporate, individual, estate, retirement plan, and trust tax returns as well as technology consulting services regarding installation and training on QuickBooks. Blackman & Sloop provides services in Raleigh, Durham, Chapel Hill, RTP, Hillsborough, Pittsboro, Charlotte, and the rest of North Carolina. To find out more please visit http://www.blackmansloop.com
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