This is a news release from United States Department of Health and Human Services and the Department of the Treasury.
This year's tax season is the first time tax filers will be asked to provide basic information regarding their health
coverage on their tax returns. For most taxpayers, meeting this new requirement will be as simple as checking a
box. Specifically, about three-quarters of taxpayers – those who had 2014 health coverage through their employer,
Medicare, Medicaid, among other qualifying sources – will just need to check a box when they file their taxes to
indicate that they had coverage for all of 2014.
A much smaller group of taxpayers will take different steps, such as claiming an exemption if they could not
afford insurance or met other qualifications, or making sure that they received the correct amount of financial
assistance if they took advantage of tax credits when they enrolled in coverage through the Health Insurance
Marketplace last year. A fraction of taxpayers will pay a fee if affordable health insurance plans were available
for them last year, but they chose to not enroll. This tax season, the fee is either $95 per person or 1% of
household income – whichever is greater. Next year the fee increases to be the greater of $325 per person or 2%
of household income.
Tax filers who have to pay the fee and who were unaware or did not understand the implications of the
requirement to enroll in coverage can take advantage of an opportunity to purchase health insurance coverage
through a special enrollment period. If tax filers do not purchase coverage for the remainder of 2015 during this
special enrollment period (March 15-April 30), they will risk having to pay the fee again next year for the entire
year when they file their 2015 income taxes.
We understand that this is the first year taxes and health coverage intersect and that this is a new experience for
tax filers. The Administration is committed to providing the information and resources tax filers need to
understand the new requirements. We're also committed to listening and learning along the way so that we can
improve our practices and enhance the resources and support we provide. This memo walks through important
information consumers need to know for this tax filing season.
Information for taxpayers who did not have health coverage in 2014:
While those who can afford health coverage but chose not to enroll may have to pay a fee, individuals
who could not afford coverage or met other conditions can receive an exemption. It is important for
individuals to know that exemptions are available and to understand the steps they need to take to request
one. Individuals who have to pay the fee should be aware that a special enrollment period is being provided
to allow them to purchase coverage for the remainder of 2015. 2
? Qualifying for an E
Exemption: Many people who did not have health insurance in 2014 will qualify for
an exemption from the requirement to have health coverage, and will therefore not be required to pay the
fee. A variety of exemptions are available, including exemptions to help people who had no affordable
coverage options, those who had low income and lived in states that did not expand Medicaid, those who
faced certain hardships, among others. An online tool is available on HealthCare.gov to help consumers
who did not have insurance last year understand if they might qualify for an exemption. (Read more about
exemptions from the fee for not having health coverage.)
? Paying a Fee: The fee is based on a tax filer's income and how many months they were without
coverage. This tax season, the fee for individuals who made the choice to not obtain coverage is
generally either $95 per person ($47.50 per child) or 1% of household income – whichever is greater.
The fee is pro-rated by the number of months individuals did not have coverage and it is capped at the
national average premium for a bronze plan available through the Marketplaces. Next year the fee
increases to be at most the greater of $325 per person ($162.50 per child) or 2% of household income.
(Read more about the fee.)
? Special Enrollment Period to Get Coverage for 2015: Individuals and families who are subject to
the fee when they file their 2014 taxes and live in states that use the Federally-facilitated Marketplace
may be eligible for a special enrollment period to sign up for health insurance for the remainder of
2015. The special enrollment period opened on March, 15 and closes on April 30. People who meet
the following requirements are eligible to enroll:
1) Owe the fee for not having coverage for some or all of 2014;
2) Didn't know until after February 15, 2015 that the health care law required
them and every member of their household to have health coverage, or didn't understand
how that requirement would affect them or their family; and
3) Are not already enrolled in 2015 coverage through the Health Insurance Marketplace.
Some State-based Marketplaces are offering such special enrollment periods as well. Check with your
State for information. If consumers do not purchase coverage for remainder of 2015 during this special
enrollment period, they may have to pay a fee again next year for remaining months in this year when
they file their 2015 income taxes. (Read more about the special enrollment period.)
Information for taxpayers who enrolled in 2014 Marketplace health coverage:
Last year millions of people purchased quality, affordable coverage through the Health Insurance Marketplace,
with most qualifying for tax credits to make their coverage more affordable. When a consumer applied for
health coverage through the Marketplace, they provided information about their family size and estimated
their expected income for 2014. The Marketplace used this information to calculate the amount of premium
tax credit they were eligible to receive.
At this point, consumers chose how to benefit from their tax credits: either as up front payments to their insurer
to lower premiums throughout the year or as a credit when they file their taxes. Most decided to receive the tax
credits up front through advance payments that helped to lower their monthly premiums by an average of over 3
$200 per month. When accepting advance payments of the premium tax credit, consumers were told to
inform the Health Insurance Marketplace about any changes to their income or family size, because such
changes will affect the total tax credit amount for which they qualify. Consumers also had the option to
receive only a portion of their tax credits as advance payments, which could help limit the impact of any
income changes on their eligibility for tax credits.
Now that tax season is here, individuals and families enrolled in a health plan through the Marketplace will need
to provide some basic information about their health insurance when they file their taxes. In early February, most
Marketplace consumers received a statement in the mail – called a Form 1095-A – that includes all the
information they need about their coverage to file their return. Consumers use information from this form to
reconcile differences between their estimated 2014 household income, and their actual household income to
determine the final premium tax credits they were eligible for. Reconciling tax credits is similar to the
reconciliation process for taxes withheld from wages during the year – consumers receive a larger or smaller
refund based on whether the appropriate taxes were withheld based on the tax filer's actual income.
This reconciliation process ensures individuals receive the correct amount of tax credit, which will be reflected
on their tax return: a taxpayer may see a smaller refund or owe money back if they underestimated their
income, or they may get a bigger refund if they overestimated their income. This could happen if a consumer
switched jobs and ended up making more or less income in 2014 than they expected. Treasury estimates that
the vast majority of Marketplace consumers who benefited from tax credits will still receive a net tax refund.
Thus far during tax filing season, the vast majority of tax filers have received refunds and the average refund is
over $2,900. (Read more about reconciling premium tax credits.)
Most consumers can download a copy of their 1095-A through their HealthCare.gov account. Consumers are
encouraged to check the information on their forms – such as the number of people in their household – for
accuracy. People who find errors on their form can contact the Marketplace Call Center at 1-800-318-
2596 to find out how to request a corrected form.
After receiving their initial Marketplace tax statement, some Marketplace consumers learned that they needed a
corrected Form 1095-A. The vast majority of Marketplace consumers who needed an updated Marketplace tax
statement now have access to their corrected form. Individuals who filed their taxes with the original form will
not need to file amended returns. The IRS will not pursue the collection of any additional taxes from these
individuals based on updated information in the corrected forms. The Health Insurance Marketplace is committed
to making sure that consumers who need corrected forms get the information they need and receive new forms
quickly. (Read more about corrected Form 1095-As.)
Information for taxpayers with non-Marketplace 2014 health coverage:
The vast majority of tax filers – about three quarters – will only need to check a box on their tax return to
indicate that they had coverage all year. These people had Minimum Essential Coverage, which means that
their health coverage met the Affordable Care Act's requirement. These individuals and families will not
receive any new forms in the mail and they will not be required to fill out new forms when they file their 2014
income tax returns. (Read more about types of Minimum Essential Coverage.)
Help is available for tax filers:
The U.S. Department of Health and Human Services and the Department of the Treasury are collaborating with a
wide range of partners – including some of the nation's largest tax prepares as well as non-profit organizations
that mobilize volunteers on the ground. HHS is also providing resources and online tools designed to help
consumers prepare for tax filing season. Consumers with questions or who want to learn more are encouraged to
visit www.healthcare.gov/taxes. Representatives at the Marketplace Call Center are also standing by to answer
consumer questions. The call center is open 24/7 at 1-800-318-2596.
For more information about the intersection of the Affordable Care Act and Federal Income Taxes please review
the resources we have available www.healthcare.gov/taxes or or http://www.irs.gov/ACA.
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