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Health Insurance Exchange Tips for Taxpayers Before April 15

The tax penalty for lacking health coverage is rising every year, which means that it may be simpler to purchase an affordable plan through the health insurance exchange.

By Vera Gruessner

With the deadline for filing this year’s taxes just around the corner, it is useful for insurance consumers to refresh the requirements of tax filing when covered through the health insurance exchange. The majority of people who purchase health plans through the exchanges benefit from tax subsidies that decrease the cost of their monthly premiums.

Those who signed up for healthcare coverage for the first time in 2015 utilizing the marketplace will need to adhere to certain rules when filing taxes by April 15. Consumers should receive Form 1095-A from the health insurance exchange system to file their taxes, according to The CMS Blog. Those who received tax subsidies from the federal government are required to file a tax return for that assistance.

This process is similar to standard filing procedures, as taxpayers would receive a smaller or larger refund depending on how much income taxes they paid throughout the year. Kevin Counihan, CEO of the Health Insurance Marketplaces, advises throughout the article that consumers who have received advanced payments of the premium tax subsidy will need to resolve these funds when filing their tax return.

“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,” Counihan stated in the article.

“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.”

Those who fail to do so will likely have their refund checks delayed and will not receive advanced payments of the subsidy in future years, Counihan explained. In addition to Form 1095-A, insurers, employers, or government-based coverage programs may give consumers Form 1095-B or 1095-C before the tax filing deadline.

These forms should be kept in a safe place, mentions Counihan, but don’t need to be filed with federal tax returns. Taxpayers who are insured should know that they only need to check a box stating that everyone in their household has had healthcare coverage in 2015.

It is also important for Americans to realize that the tax penalty for lacking health insurance coverage is rising with every year, which means that it may be simpler to purchase an affordable plan through the health insurance exchange or through an employer.

However, it is also important to remember that there are exceptions to all rules. Some individuals who lacked healthcare coverage in 2015 are eligible for an exemption. Specifically, those who couldn’t afford medical insurance or met another type of condition are exempt from the tax penalty and individual mandate of the Affordable Care Act. More information about the tax penalty exemption can be found here.

Any consumers who have questions about tax filing, the exemptions, or their healthcare coverage should contact the Marketplace Call Center at 1-800-318-2596, advises Kevin Counihan.

It seems that more consumers than ever before have pursued obtaining health plans through the federal health insurance exchange with the Centers for Medicare & Medicaid Services (CMS) reporting more than 12.7 million individuals purchasing coverage via the marketplace.

The results also showed that seven out of ten purchasers were returning customers to the health insurance exchange. Now that the open enrollment period has concluded, the federal agencies are working on ensuring that customers continue to receive the coverage they need to access healthcare services.

Despite the rise in the amount of people purchasing plans through the health insurance exchange, there are many who leave the marketplace for employer coverage or new eligibility for Medicare or Medicaid.

In order to simplify the process of continuing coverage through a health plan, the marketplace is creating an improved payment experience for the consumer by sending reminders when a bill is due and working with insurers to reinstate coverage for consumers who had difficulty paying a monthly fee.

The federal marketplace is also working to improve their data matching capabilities and creating appropriate income verification thresholds. CMS is also looking to expand their outreach abilities in order to assist consumers who are having data matching problems.

“Another reason consumers may lose their coverage is if we don’t receive the information we need to confirm their eligibility,” Counihan mentioned. “The law specifies that when we can’t verify key information like a Social Security number or income immediately through automatic checks against other Federal data, consumers can enroll in coverage for 90 or 95 days while we work with them to verify their eligibility. But after that, their coverage is cancelled or their financial assistance is adjusted or ended.”

“The fact that we cannot immediately confirm eligibility does not mean an individual is ineligible for coverage or financial help,” he continued. “For many consumers, the issue is a change in employment or wages since they filed their last tax return. That’s why the law gives consumers time to provide more information, and that’s why the majority of “data-matching” issues are resolved because consumers successfully submitted documentation that substantiates what they told us on the application. Nonetheless, in 2015, coverage was terminated or APTCs were adjusted due to data matching issues for about 1.7 million consumers.”

“As with other Marketplace rules, CMS is committed to both making sure the process works better and limiting access to coverage and financial assistance to those individuals who are indeed eligible.”

As the organization continues to expand their tools and resources, consumers would be wise to adhere to tax filing requirements in order to receive their refunds in a timely manner and continue their tax subsidy eligibility.


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