The First Tax Filing Season under the Affordable Care Act is Approaching: What Do Marketplace Consumers Need to Know?

As tax season approaches, all tax filers must report whether or not they had health insurance coverage on their 2014 tax returns.  According to the IRS, the majority of tax filers will just need to check a box on their tax forms indicating they had minimum essential coverage (MEC) such as employer-sponsored insurance, Medicare or Medicaid. While marketplace coverage is considered MEC, individuals with marketplace coverage receiving or claiming premium tax credits will need to take a few more steps.

Consumers with marketplace coverage getting or claiming premium tax credits will need to complete Form 8962 as part of their tax filings. Consumers will use Form 8962 to reconcile the amounts of tax credits they received (based on projected income) with what they should have received (based on actual income). In order to complete Form 8962, marketplaces will provide all consumers with a Form 1095-A (Health Insurance Marketplace Statement) that provides information about their marketplace coverage including the amounts of the premium tax credit they received in advance. Consumers should review the information on their Form 1095-A and notify the Marketplace if they believe their information is incorrect. According to CMS, consumers should receive the Form 1095-A from federally facilitated Marketplaces by early February. CMS has provided a summary of Frequently Asked Questions about Form 1095-A, available here and a blank Form 1095-A can be found here.

Individuals who did not have health insurance but qualified for an exemption from the individual mandate will use Form 8965 to submit information about their exemption with their tax returns. Form 8965 includes exemptions that were obtained from the Marketplace, as well as those filers can claim from the IRS as part of filing a return. More information about exemptions can be found at FAQ 1.1.5 in our online Navigator Resource Guide.

Note that individuals without health insurance coverage who do not qualify for an exemption in 2014 will be required to pay the individual shared responsibility payment as part of their tax return.

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