CMS BLOG
March 16, 2016
By: Kevin Counihan, CEO of the
Health Insurance Marketplaces, Centers for Medicare and Medicaid Services
Taxes
and Health Care Coverage: Five Tips for Tax Filers
Last year, millions of people
purchased quality, affordable coverage through the Health Insurance
Marketplace, and most benefitted from advance payments of the premium tax
credit that lowered their monthly premiums. With the tax filing deadline a few
weeks away, it’s a good time to remind everyone – both new and renewing
consumers – about what they need to know when they file their taxes.
For those who returned to the
Marketplace in 2015 to renew coverage or pick a different plan, the tax filing
process is generally the same as last year. But, for the millions who signed up
for Marketplace coverage in 2015 for the first time, the process may be a new
one. By now, all Marketplace consumers should have received a statement in the
mail from the Marketplace called a Form 1095-A. These statements include
important information needed to complete and file a tax return.
Marketplace consumers who received
advance payments of the premium tax credit are required to file a tax return to
reconcile that financial assistance. This is similar to the reconciliation
process for taxes withheld from wages during the year – consumers receive a
larger or smaller refund depending on whether the appropriate taxes were
withheld based on the tax filer’s actual income and other factors.
It’s extremely important that those
who received advance payments of the premium tax credit reconcile these
payments when they file their tax return. Individuals who do not do so will
generally see their refunds delayed, and are not eligible to receive advance
payments of the premium tax credit in future years.
Individuals with Marketplace or
other types of health coverage may also have received additional forms called a
Form 1095-B or 1095-C from their employer, insurance company, or the government
program that provides their coverage, like Medicare or Medicaid. Taxpayers
don’t need to attach this information to their return or wait to receive the
form before filling their federal taxes, but should keep it in a safe place
with other tax records.
An important reminder: Since most
tax filers use a tax preparer or tax preparation software, most filers just
need to answer questions when prompted.
We are here to help. Marketplace
consumers having questions should contact the Marketplace Call Center (1-800-318-2596).
Additional resources and information for is also available at www.healthcare.gov/taxes
or www.IRS.gov/aca.
Here’s summary of five helpful tips
for both Marketplace consumers and other tax filers when it comes to filing
taxes this year:
Five Tips for Tax Filers
- Most people just need to
check a box: The
vast majority of tax filers have qualifying coverage (including employer
coverage, Medicare, Medicaid, or other coverage) and will just need to
check a box when they file their taxes to indicate that that everyone in
their household had coverage for 2015. This year, many consumers will
receive a new form called a Form 1095-B or a Form 1095-C in the mail from
their employer, insurance company, or the government program that provides
their coverage, like Medicare or Medicaid. Taxpayers don’t need to attach
this information to their return or wait to receive the form before
filling their taxes, but should keep it in a safe place with other tax
records. For more information on all these forms, visit the IRS website
at: https://www.irs.gov/Affordable-Care-Act/Questions-and-Answers-about-Health-Care-Information-Forms-for-Individuals
-
- Marketplace consumers must file a tax return to
reconcile any advance payment of the premium tax credit they received in
order to maintain eligibility for future help: By now, all Marketplace consumers should have received
a statement in the mail from the Marketplace called a Form 1095-A. These
statements include important information needed to complete and file a tax
return. It’s extremely important that those who received advance payments
of the premium tax credit reconcile these payments when they file their
tax return. Individuals who do not do so will generally see their refunds
delayed, and are not eligible for advance payment of premium tax credits
in future years.
-
- The fee
for not having coverage is increasing. For those who could afford
health insurance and chose not to get coverage, the fee for not having
minimum essential coverage in 2015 has increased to 2 percent of household
income or $325 per person. The fee is pro-rated based on how many months a
person is uninsured. The fee goes up again for 2016. If someone doesn’t
have coverage or an exemption in the 2016 calendar year, but could afford
coverage, the fee increases to $695 per person or 2.5% of income,
whichever is higher.
- Some people who didn’t
have health coverage in 2015 will qualify for an exemption: While those who can
afford health coverage but chose not to enroll generally have to pay a
fee, some people who couldn’t afford coverage or met other conditions can
receive an exemption. You can find out more information online
from the Marketplace or IRS at https://www.healthcare.gov/health-coverage-exemptions/exemptions-from-the-fee
or https://www.irs.gov/Affordable-Care-Act/Individuals-and-Families.
- Help is available. If people have questions about Marketplace tax forms,
qualifying for exemptions, or the fee, they should contact the Marketplace
Call Center. The call center is open all day, every day at 1-800-318-2596.
Additional resources and information for is also available at www.healthcare.gov/taxes
or www.IRS.gov/aca
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