The Administration has announced that approximately 800,000 taxpayers who enrolled through one of the Health Insurance Marketplaces (HIM) received an incorrect Form 1095-A. The form gives taxpayers the information they need to prepare Form 8962-Premiuum Tax Credit on their 2014 tax returns. This wasn’t something an individual would have easily caught on their own. The issue is that the second lowest cost Silver Plan(SLCSP) benchmark was calculated incorrectly. Using this number will mess up the calculations for the Premium Tax Credit. New Form 1095-As are being issued but it will be early March before they are released.
To discover if they are one of those who will be getting a corrected form, taxpayers can log into their Healthcare.gov account. There will be a notice if they are receiving a new 1095-A. If they are getting a revised form, they will have to wait until they receive the new form. For taxpayers who have already filed their return (or those who will use their old form to get their refund now), they will have to amend their original return after they receive their corrected 1095-A. Taxpayers can also use this tool to look up their correct SLCSP amount or call the Marketplace call center at 1-800-318-2596 if they can’t wait until March to file their return.
Approximately another 100,000 taxpayers who use the California Covered exchange will also be receiving corrected Form 1095-As.
The Center for Medicare and Medicare Services (CMS) has announced a special enrollment for some taxpayers who have missed the regular open enrollment period for the Health Insurance Marketplace. This program is targeted at taxpayers who were unaware they had to have health insurance (no comment) and had to pay a shared responsibility penalty in their 2014 tax return. To qualify, taxpayers must live in a state with a federally facilitated HIM, got stuck with the shared responsibility payment for 2014 and they can’t already have a policy through the HIM. Also, they couldn’t have known about the shared responsibility payment until after February 15, 2015. For taxpayers who qualify, the federal HIM will be open for enrollment from March 15 to April 30, 2015.
Many taxpayers will qualify for an exemption from the health insurance requirement. Some of the exemptions are simply claimed on their tax return while others need to be applied for through the HIM and an exemption number need for the return. The CMS has a tool which will tell taxpayers if they qualify for an exemption no matter who grants the exemption. If they qualify for a HIM exemption, they will still need to apply for the exemption.
The ACA keeps making this tax season…….. interesting.