2014 Health Care Coverage Exemptions, How to Apply for One, and New Exemption Lookup Tool

Individuals who did not have health insurance coverage for all or part of 2014 will not owe an additional tax (penalty) for not having health insurance if they qualify for an exemption. In fact, most individuals who did not have health coverage will qualify for an exemption.

What follows is information on the new exemption lookup tool that was recently added to healthcare.gov, as well as a listing of the exemptions available to individuals for Tax Year 2014 and how to apply for them.

New Exemptions Lookup Tool

To help individuals (who did not have health insurance during 2014) determine what exemption they may qualify for, a new health care coverage exemption tool has been added to healthcare.gov. Once an individual answers a few questions the tool will let them know:

• What exemptions may apply to them
• Details to help them decide whether or not to apply
• Read more

Exemptions Available for 2014 and How to Apply For One

Exemptions that may be applied for when filing a 2014 federal return:

• 2014 health coverage is considered unaffordable
• Individual’s income is below the filing threshold (Form 8965, Part II)
• Individual was a U.S. Citizen living abroad
• Individual not lawfully present in the U.S.
• Read more

Exemptions that must be applied for through the Marketplace:

• Individual was a member of a recognized religious sect whose members object to insurance. See the Members of Recognized Religious Sects or Divisions Exemption Application form on healthcare.gov for more information.
• One of the following Marketplace defined hardship exemptions:
• Individual is homeless
• Individual was evicted in the past 6 months or was facing eviction of foreclosure
• Individual received a shut-off notice from utility company
• Individual recently experienced domestic violence
• Read more

Click here to read the entire CrossLink Tax Update that includes more information on 2014 health care coverage exemptions and the new healthcare.gov Exemption Lookup Tool.

Special Federal Marketplace Enrollment Period and Corrected Form 1095-A

The Centers for Medicare Services (CMS) made two announcements on February 20, 2015 concerning a special enrollment period for individuals who did not have health coverage in 2014 and information concerning the number of individuals (who used the Federal Marketplace) that will be receiving a corrected Form 1095-A in March due to incorrect information contained on the original 1095-A that they received around the end of January.

Special Federal Marketplace Enrollment Period for the Tax Season
For individuals who reside in a state that uses the Federal Marketplace, a special enrollment period will be available to those individuals and their families who did not have health coverage in 2014 and are subject to the shared responsibility payment (penalty) when they file their 2014 federal return.

Qualifying individuals will have the opportunity to purchase health insurance from March 15, 2015 through April 30, 2015 if they reside in a state that uses the Federal Marketplace and:

• Are not currently enrolled in 2015 coverage through the Federal Marketplace;
• Attest that they filed their 2014 federal tax return and paid a fee (penalty) for not having health coverage in 2014; and
• Attest that they first became aware of, or understood the implications of the Shared Responsibility Payment (penalty) after the end of open enrollment (February 15, 2015) in connection with preparing their 2014 federal return.

Individuals who are seeking to take advantage of this special enrollment period can find out if they are eligible by visiting the main get coverage page on healthcare.gov.

For more information on this announcement see the CMS Announces Special Enrollment Period for Tax Season press release on the CMS website.

Corrected Form 1095-A for Certain Individuals
CMS has announced that approximately 20 percent of individuals (800,000) who used the Federal Marketplace to obtain their 2014 health insurance and received an advance premium tax credit will receive a corrected Form 1095-A (Health Insurance Marketplace Statement) in early March. These individuals should also receive a phone call explaining that they will be receiving a corrected form 1095-A and that form should be used to complete Form 8962 (Premium Tax Credit) for their 2014 federal tax return.

The original Form 1095-A included the incorrect Second Lowest Cost Silver Plan (SLCSP) Premium amounts. This amount is needed in order to calculate the 2014 Premium Tax Credit on Form 8962, and if it is incorrect, the calculated premium tax credit will also be incorrect.

To find out if an individual is affected, they should do the following:

1. Log in to their account on HealthCare.gov. Once they are logged in, they will see a notice message that will let them know whether they are affected.
2. If their Form 1095-A is affected the individual has not filed their 2014 federal return, they should wait until they receive the corrected Form 1095-A in March. The corrected Form 1095-A can also be accessed via the individual’s account on Healthcare.gov in early March.
3. If their Form 1095-A is affected and the individual needs to file their return now they can do one of the following:
• Look up the Second Lowest Cost Silver Plan Premium amount using the Find 2014 Silver Plan Premium Tool on healthcare.gov.

Or

• Call the Marketplace Call Center at 1-800-318-2596.

For those who have already filed their 2014 federal return (which CMS estimates at 50,000), the Treasury Department and IRS will be providing information soon.

For more information on this announcement see the What Consumers Need to Know about Corrected 1095-As blog posting on the CMS website.

Individuals Who Opted to Not Take Advance Premium Tax Credit and Form 1095-A (Health Insurance Marketplace Statement)

If an individual opted to not receive an advance premium tax credit (subsidy) when they obtained their health insurance through the Federal Marketplace, the Form 1095-A (Health Insurance Marketplace Statement) that they receive will have zeros in Part III, column B (Monthly Premium Amount of Second Lowest Cost Silver Plan – SLCSP) for the months that they had health insurance in 2014.

In order for these individuals to be able to calculate a premium tax credit on Form 8962 (Premium Tax Credit), they must enter an amount greater than zero for the Second Lowest Cost Silver Plan in Part II, column B. To determine what this amount should be, the individual can use the Find 2014 Silver Plan Premium look up tool on the healthcare.gov website.

Here is the information an individual will need to determine the Second Lowest Cost Silver Plan amount using the tool:

• Zip Code and County where they lived each month in 2014
• Age of each family member covered
• Months each family member was covered and was not eligible for other coverage outside the marketplace.

If the individual obtained their insurance through one of the 15 State Marketplaces and did not receive a subsidy, then Form 1095-A, Part III, column B may contain zeros for the months that they had health insurance during 2014. If this is the case, they will need to go to the applicable State Marketplace website to determine what the Second Lowest Cost Silver Plan amount should be as follows:

• California – Form 1095-A Information
• Colorado – Find the Second Lowest Cost Silver Plan Premium
• Connecticut – Silver Plan Premium Calculator
• District of Columbia – SLCSP Calculator
• Hawaii – Contact Information
• Kentucky – Benchmark Plan Tool
• Maryland – SLCSP Worksheet
• Massachusetts – General website
• Minnesota – Silver Plan Look up Tool
• Nevada – SLCSP Table
• New York – SLCSP table
• Oregon – SLCSP Lookup Tool
• Rhode Island – Tax FAQs page
• Vermont – Tax Questions page with SLCSP information
• Washington – SLCSP Lookup Tool

What to Do if a Taxpayer Loses or Did Not Receive Form 1095-A

Any individual who obtained their health insurance through the federal or a state Marketplace should receive a Form 1095-A (Health Insurance Marketplace Statement).

If a taxpayer who was supposed to receive a Form 1095-A for Tax Year 2014 either lost it or did not receive it, they can do one of the following:

• Log-in to their account on the website of the Federal or the State Marketplace they obtained their health insurance from and see if their Form 1095-A is available as a PDF.
• If their Form 1095-A is available, then they can print it out
• If their Form 1095-A is not available, they will need to call the applicable Marketplace and have the Marketplace mail them a replacement copy
• Call the Federal or State Marketplace and have a replacement copy mailed to them

See the Health Insurance Marketplace page on irs.gov for a listing of contact information for the Federal and State Marketplaces.

IRS Update: Affordable Care Act and the 2014 Federal Return

As the beginning of the 2014 filing season is upon us, now is the time to emphasize the importance of the Form 1095-A for taxpayers that received an advance premium tax credit (subsidy) in 2014, as well as remind everyone of how the Affordable Care Act will affect all 2014 federal returns.

Importance of Form 1095-A (Health Insurance Marketplace Statement) for Individuals Who Received an Advance Premium Tax Credit (Subsidy)

For individuals who received an advance premium tax credit (subsidy) that reduced their monthly health insurance premiums, it is necessary to have the Form 1095-A in order to complete the Form 8962 (Premium Tax Credit) because it contains the information that is needed to both calculate the premium tax credit and complete the reconciliation of the subsidy with the calculated credit.

Since the filing season begins on January 20, 2015, and a large number of the individuals who received a subsidy will not receive their copy of the Form 1095-A until the first week of February, tax preparers should not complete and file a return of an individual who obtained their health insurance through a Marketplace until they have received a copy of the Form 1095-A – allowing them to complete and include Form 8962 with the return. Read More

All Individual Federal Returns Will Be Affected by the Affordable Care Act

Everyone who files a 2014 federal tax return will be affected in one of the following ways by the Affordable Care Act:

• Most individuals will only have to check the Full Year Coverage box on Form 1040 since they were covered by their employer, government program (such as Medicaid or Medicare), or private insurance purchased outside of Marketplace for all of 2014.
• Taxpayers who obtained their health insurance at the federal or a state marketplace will:
• Receive Form 1095-A (Health Insurance Marketplace Statement) from the federal or state Marketplace around January 31, 2015;
• Complete Form 8962 (Premium Tax Credit) to claim the Premium Tax Credit and, if they received an advance premium tax credit (subsidy), complete the required reconciliation.
• Read More

Click here to read the entire CrossLink Tax Update on how the Affordable Care Act affects 2014 Tax Returns.