CMS continues to raise awareness about the intersection of taxes and health care
With the tax filing deadline two weeks away, the Centers for Medicare & Medicaid Services (CMS) is continuing to help consumers understand how health coverage and taxes intersect. This year’s tax season is the first time individuals and families will be asked to provide basic information regarding their health coverage on their tax returns. While the vast majority of tax filers – about three quarters – will just need to check a box on their tax return indicating they had health coverage in 2014, people who have coverage through the Health Insurance Marketplaces, or did not enroll in coverage, will take different steps that will be a part of the tax filing process starting this year.
“Our focus is squarely on increasing public awareness about this tax season,” said Kevin Counihan, CEO of the Health Insurance Marketplaces. “We’re making sure Marketplace consumers have the information they need to file their tax returns and that those who went without health coverage last year are aware of the requirement to have coverage or qualify for an exemption. Those who don’t qualify for an exemption and remain uninsured and did not understand the implications of the requirement to have insurance will need to pay a fee but also will have a final opportunity to enroll in affordable health coverage for the remainder of the year. As of March 29, about 36,000 consumers have selected plans using the tax special enrollment period in States using the Federally-facilitated Marketplace. Eligible consumers still have time to sign up and we want to encourage all those taxpayers who qualify to consider visiting HealthCare.gov to shop for affordable coverage.”
Tax filers who had health coverage through their employer, Medicare, Medicaid, veterans care or other health coverage that qualifies as “minimum essential coverage” will only need to check a box when they file their tax returns to indicate that they had coverage for all of 2014. The remaining taxpayers – about one-quarter — will take different steps, including:
· Reconciling Premium Tax Credits: Taxpayers who enrolled in coverage through the Health Insurance Marketplaces will use a tax statement from their Marketplace called a Form 1095-A to reconcile any tax credits they benefited from to ensure that they receive the correct amount. Reconciling tax credits is similar to the reconciliation process for taxes withheld from wages during the year – consumers receive a larger or smaller tax refund based on whether the appropriate amount of taxes were withheld based on the tax filers actual income. The Department of the Treasury expects that the overwhelming majority of these taxpayers will still receive a tax refund.
We have provided updated 1095-A Forms to the vast majority of consumers who were notified that they needed a corrected form. There are a small number of forms that will require additional casework – including about 1,500 forms out of the 820,000 forms that had an incorrect second lowest cost silver plan. CMS continues to research requests for corrections or clarifications as they come in from consumers. Any Marketplace consumer concerned about the status of their updated form should contact the Marketplace Call Center at 1-800-318-2596.
· Claiming Exemptions: Individuals who could not afford coverage or met other conditions may be eligible to receive an exemption for 2014. A variety of exemptions are available, including exemptions to help people who had no affordable coverage options [PDF 24.7KB], those who had low income and lived in states that did not expand Medicaid [52.1KB] and those who faced certain hardships [45.7KB], among others. To help consumers who did not have insurance last year determine if they qualify for an exemption, a health coverage tax exemption tool is available at HealthCare.gov and CuidadodeSalud.gov.
· Paying the Fee: People who did not have health coverage in 2014 and do not qualify for an exemption will have to pay a fee – generally $95 per adult or 1 percent of their household income, whichever is greater – when they file their taxes this year. The fee increases to $325 per adult or 2 percent of income for 2015. CMS is providing a special enrollment period to allow individuals and families who are subject to the fee when they file their taxes with an opportunity to purchase health insurance coverage for the remainder of 2015. Since March 15, when the tax special enrollment period (SEP) began, about 36,000 consumers have used the tax special enrollment period through HealthCare.gov to select a plan.
The tax special enrollment period began on March 15, 2015 and will end at 11:59 pm EDT on April 30, 2015 for people living in States with a Federally-facilitated Marketplace. Those eligible for this special enrollment period must attest to all of the following:
1. They did not know that the health care law required them and their household to have health coverage, or they didn’t understand how that requirement would affect their family.
2. They owe the fee for not having coverage for one or more months in 2014.
3. They are not already enrolled in 2015 coverage through the Health Insurance Marketplace or outside of the Marketplace.
Some State-based Marketplaces are offering such special enrollment periods as well. Check with your State for information. If consumers do not purchase coverage for remainder of 2015 during this special enrollment period, they may have to pay a fee again next year for remaining months in this year when they file their 2015 income taxes. (Read more about the special enrollment period.)
Consumers seeking to take advantage of the can find out if they are eligible by visiting https://www.HealthCare.gov/get-coverage. Consumers can find local help at: LocalHelp.HealthCare.gov or call the Federally-facilitated Marketplace Call Center at 1-800-318-2596. TTY users should call 1-855-889-4325.
The administration is committed to providing the information and tools tax filers need to understand the new requirements. If consumers have questions about their taxes, need to download forms, or want to learn more about the fee for not having insurance, they can find information and resources at www.HealthCare.gov/Taxes or http://www.IRS.gov. Consumers can also call the Marketplace Call Center at 1-800-318-2596. Consumers who need assistance filing their taxes can visit IRS.gov/VITA or IRS.gov/FreeFile.