HPL#10

Just received this message about a problem with some f1095A’s. We will put together a plan to help our clients check their status.

Date:      February 20, 2015

To:         All Tax-Aide Volunteers

From:     Marcy Gouge, Assistant National Director, AARP Foundation Tax-Aide & Pete Freiermuth, Chair NTTC

SubjectCyberTax TY2014-08: Critical News released today regarding completing tax returns which have ACA issues

Critical News released today regarding completing tax returns which have ACA issues:

The Centers for Medicaid and Medicare (CMS) have released the attached news alert which announced that a significant number of the form 1095-A sent at the end of January contained a critical error.  This information affects only taxpayers who had Federally-facilitated Marketplace coverage in 2014 and used tax credits to lower their premium costs.

Key Elements of Attached Alert:

  • The original version of the form 1095-A issued to taxpayers who purchased insurance from the Insurance Marketplace listed an incorrect “benchmark plan premium amount”.  Corrected forms are being prepared and will be sent to these taxpayers;
  • About 20 percent of the tax filers who received these forms, or approximately 800,000 (< 1% of total tax filers) are affected by this error;
  • Based on preliminary estimates, CMS believes that approximately 90-95% of these tax filers who received incorrect forms haven’t filed their tax return yet.   For those who have not filed, CMS is advising them to wait until the first week of March when they receive their new form or go online for correct information before filing.
  • For those who have filed their taxes — approximately 50,000 (< 0.05% of total tax filers) – the Treasury Department will provide additional information soon.

 What this means for Tax-Aide sites:

  • Counselors should tell affected taxpayers that CMS advises them to wait to file until they receive the corrected form;
  • Tax sites should wait to prepare Amended returns for those who have already filed and might have an incorrect form to wait for further direction as noted.
  • Taxpayers can find out if they are affected by logging in to their account at www.HealthCare.gov. They will see a notice message that will let them know if their form was or was not affected.  When their corrected form is ready they will receive a message.
  • If a taxpayer does not want to wait to file, there are two options:  1) They can go to the above website to find a research tool to find the lowest cost Silver plan that applied to their household in 2014, or 2) They can call the Marketplace Call Center at 1-800-318-2596 (TTY: 1-855-889-4325) to request assistance.
  • It is the taxpayer’s responsibility to obtain the corrected form or to get assistance from CMS, not the counselor’s responsibility. Questions about this Cybertax should be sent to OneSupport Help Center.

============================

The CMS Blog: What Consumers Need to Know about Corrected Form 1095-A

FEBRUARY 20, 2015

Last year, millions of Americans used advance payments of tax credits to help lower the cost of their monthly health insurance premiums. Now that tax season is here, individuals and families enrolled in a health plan through the Marketplaces will need to provide some basic information about their health insurance when they file their tax returns.

If you signed up for coverage through the Marketplace last year, you should have received a statement in the mail in February from the Marketplace called a Form 1095-A. This statement includes important information you need in order to complete and file your tax return. One piece of information included in your 1095-A is the premium amount for the “second lowest cost Silver plan” in your area. This premium amount represents the benchmark plan we use to determine the amount of premium tax credit you were eligible to receive.

Your 1095-A form should have arrived in your mailbox in February. Most consumers can also download a copy of their 1095-A through their HealthCare.gov account. We have been urging consumers to check the information on their forms – such as the number of people in your 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.

About 20 percent of the tax filers who had Federally-facilitated Marketplace coverage in 2014 and used tax credits to lower their premium costs – about 800,000 (< 1% of total tax filers) – will soon receive an updated Form 1095-A because the original version they were issued listed an incorrect benchmark plan premium amount. Based upon preliminary estimates, we understand that approximately 90-95% of these tax filers haven’t filed their tax return yet. We are advising them to wait until the first week of March when they receive their new form or go online for correct information before filing. For those who have filed their taxes — approximately 50,000 (< 0.05% of total tax filers) – the Treasury Department will provide additional information soon.

It’s important to note that this issue does not affect the majority of Marketplace consumers and only affects people who signed up through one of the 37 states using HealthCare.gov. About 80 percent of Marketplace consumers who received a 1095-A from the federal Marketplace do not have affected forms and should go ahead and file their annual tax return. Additionally, this issue does not mean that consumers received the incorrect amount of tax credit throughout the year. It’s also important to note that this does not affect the vast majority of tax filers who will just need to check a box on their tax return to indicate that they had health coverage in 2014 either through their employer, Medicare, Medicaid, veterans care, or other qualified health coverage programs.

Our priority is to make sure people with affected forms are alerted to the issue and are made aware of the steps they need to take. If your form was affected, you will receive a phone call from the Marketplace by early March, in addition to letters and emails with additional information about the status of your form.

Marketplace consumers concerned about the status of their 1095-A forms should take the following actions:

You can find out if you are affected by logging in to your account at HealthCare.gov. You will see a notice message that will let you know if your form was or was not affected. A majority of tax filers with Marketplace coverage through HealthCare.gov that received a 1095-A– about 80 percent – will find that their form was not affected by this issue and will be able to file their taxes with their current form.

Wait to file if your form was affected. It’s best to wait to file your tax return until you receive your corrected 1095-A Form from the Marketplaces. New forms are being sent from the Marketplace beginning in early March. When your corrected form is ready, we’ll also send a message to your Marketplace account on HealthCare.gov.

If you need to file now, use our tool. If you can’t wait, and want to find the correct amount of the second lowest cost Silver plan that applied to your household in 2014, you have 2 options: 1) You can use this tool to find that amount, or 2) You can call the Marketplace Call Center at 1-800-318-2596 (TTY: 1-855-889-4325) and they can help.

As soon as we discovered the error, we immediately began examining who was affected, how to communicate about the error, and how to make the corrections process as simple as possible for consumers. We are committed to making sure that consumers who need corrected forms are contacted with updates and will receive new forms quickly. We are focused on making sure that every Marketplace consumer understands how taxes and health care intersect and if they need to get a corrected form, the steps they need to take.

Consumers with questions or who want to learn more are encouraged to visit http://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.

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