Taxes and Health Care Coverage: Five Tips for Tax Filers

By: Kevin Counihan, CEO of the Health Insurance Marketplaces, Centers for Medicare and Medicaid Services

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

  1. 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
  1. 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.
  1. 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.
  1. 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.
  1. 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 healthcare.gov/taxes or www.IRS.gov/aca

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