Economics, Health Care

H&R Block warns millions not prepared for Obamacare penalties

Image Credit: Shutterstock

Image Credit: Shutterstock

The Washington Post reports this morning that tax preparer H&R Block is warning that millions of Americans will be in for a shock in a few years’ time when they don’t get the refunds they were expecting, thanks to Obamacare.

In a piece titled “Tax preparer fears health law’s bite out of refund,” the Post writes:

Of all the companies worried that the Affordable Care Act will be bad for business, H&R Block may lay claim to the most unique gripe.

The firm prepares millions of tax returns, one of every seven that gets filed to the Internal Revenue Service. The vast majority of its consumers receive a refund; all told, their 26.5 million customers received $50 billion in refunds in 2012.

The Affordable Care Act could change that: It charges a tax penalty to Americans who do not carry health insurance coverage. And that has H&R Block worried that some of those refunds will get eaten up – with a lot of angry customers pointing a finger at them.

“Eighty-five percent of our customers get a refund,” Kathy Pickering, who directs the H&R Block Tax Institute, says. “That refund could be offset by the penalty. And if that happens, they’re going to be understandably angry.”

The company did some polling research to see how much Americans knew about the law and its coming penalties and subsides. Not much, they found.

The company found, in a survey conducted last year, that 77 percent of Americans had no idea that the income tax return they’re filing right now will determine how generous, or skimpy, of a subsidy they receive in 2014.

Forty-four percent of those between 18 and 34 were unaware that they would face a penalty for not purchasing coverage.

“We found that most people didn’t understand what the Affordable Care Act would mean for them,” Pickering told me.

So the company is offering a free “H&R Block Tax and Health Care Review” for customers to see how Obamacare will affect them when the new penalties and subsidies kick in come 2014.

One review was drawn up for a fictional family of four, who had an income of $40,000 in 2012. That family would be eligible for a subsidy and, if they bought health insurance on the exchange, H&R Block estimates it would cost $170 per month.

If they decided to forgo coverage, they will face a penalty of $285 in 2014, which would jump to $975 in 2015. The CBO estimates that about 6 million Americans will pay this fine.

11 thoughts on “H&R Block warns millions not prepared for Obamacare penalties

  1. Obama can rot in Hell It’s none of his fricken business If I carry Healthcare Insurance or not He’s not more then a Socialist Dictator hell bent on destroying this country.

  2. Obamacare is a no brainer for many…..Pay the tax…pay for services out of pocket…when anything big comes up jump on the can’t be denied bandwagon! Stupid system built to implode…..creating the crisis for single payer!

    • Todd, you are absolutely correct– this system was intended to fail, at the cost of many dollars and the dislocation of resources, in order to set the stage for complete government control of health care. The statists create the ‘solution’, then follow up with more ‘solutions’to the problems caused by the first one.

  3. I;m sorry, but if you all didn’t know what ‘Affordable’ meant, then who is the dummy here? It’s a great law, people will finally be able to afford insurance, MDs won’t have to cut staff because of too many patients with no care coming to their offices as well as the hospitals going bankrupt or not being able to keep up with modern equipment b/c they got too many patients going thru the ERs and then staying in a bed until well without insurance. Live with a disease, then lose your job and guess how many insurance companies will insure you with a pre-existing condition? NONE! Walk in those shoes and then see how you feel about this great law. I am amazed at how uncaring some Americans are now days and also who think they don’t need insurance and would rather save that money. Yep, until they get a disease or in an accident, they run up huge bills and then have to go bankrupt. Who pays for all of the aforementioned? Come on people, simple answer. We ALL do! Insurance and medical rates go up. Be smart and think it through, this is a good law. Time will teach you hopefully. I pray you don’t learn the hard way.

    • Great law? Yes, that must be why Democrats did not read it before passing it.

      Great law? Yes, that must be why Big Corporations, Big Unions, Congressional staff and even IRS workers want to be exempted from it.

      Great law? Yes, that must be why Walgreens, who has $million legal department, decided to drop insurance for it’s 160,000 employees

      Great law? Yes, that is why it has grown to over 20,000+ pages of rules and regulations. You have to read the over 20,000+ pages to see, quote Nancy Pelosi, “All the good things in this bill”

      USA is not a mean country. We want healthcare for those who need it. We, mostly, are also not a stupid country. Every forecast, prediction and justification for Obamacare has been proven a lie. In exchange for these false promises and lies, we have a 20,000+ pages of new government regulations NOBODY can fully understand. What people can understand is this:
      The people will be more controlled and poorer. The government and lawyers will be richer and more powerfull.

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