The federal insurance marketplace healthcare.gov recently announced that approximately 800,000 taxpayers were sent incorrect information on their form 1095-A and they are urged to wait to file their taxes until the first week of March.
The 800,000 people who used the tax credit to lower their premium cost will be receiving an updated 1095-A shortly. Based on estimates, approximately 90-95 % have not yet filed their taxes. For those who have already filed their taxes, the Treasury Department will be providing additional information soon.
Form 1095-A contains important information that taxpayers need to complete their returns. This includes the premium amount for the “second lowest cost Silver plan” in the taxpayer’s area. This particular premium is said to be a benchmark used to determine the amount of premium tax credit taxpayers are eligible to receive. That information was incorrectly calculated.
This issue only affects 20% of taxpayers who signed up in the Marketplace and only those who signed up through Healthcare.gov. Most taxpayers will be able to check a box on their tax return to indicate they had health coverage in 2014 either through their employer, Medicare, Medicaid, veteran’s care or other qualified health coverage programs. Kevin Thompson, CPA says “we have seen only two 1095-A forms. One was correct and one, as stated here, was incorrect. It’s unfortunate that the administration has elected to make an already difficult and daunting experience for most taxpayers and make it worse.”
Taxpayers who are affected will be receiving a call from the Marketplace to alert them of the problem in early March and will also be sent letters and emails. Those who are concerned about their status can login to their account at healthcare.gov.
If a taxpayer needs to file their taxes sooner, a tool will be available to determine the correct amount. They can call the Marketplace at 1-800-318-2596 or alert their tax preparer. Thompson says “we had already decided to increase our fees by $150 for each tax return to comply with the requirements of the Affordable Care Act. I am not sure we can absorb the amended returns necessary to get this right.”
CMS also announced that it will provide a special enrollment period for people who learn of the tax penalty for not having health care at the time they file their taxes.
It’s recommended that you contact your tax preparer as soon as possible if you believe you have received incorrect information from the Marketplace. They will be able to insure you that the correct adjustments have been made.
Contact Kevin Thompson CPA
email@example.com or call him @ (310) 450-4625 x102.