Although Republicans are outlining a proposal to provide an “off ramp” for states and consumers to exit the Affordable Care Act, and the Supreme Court is hearing oral arguments on a legal challenge to the federally-operated health exchange, state exchanges have been up and running.
While tax preparers are fielding questions on the ACA, the state health insurance exchanges are also receiving—and answering—tens of thousands of calls every day from consumers as they sign up for health insurance.
For many taxpayers, their first introduction to the ACA may be the Form 1095-A that they receive in the mail, and bring with them—or forget to bring with them—to their tax preparer. Many have questions about the form, and state exchange call centers have been inundated with inquiries.
While some taxpayers might have expected it, many have no idea why they received this form, and what they are supposed to do with it, according to Ferdinand Morales, vice president at Maximus, the firm running contact centers for six state health insurance exchanges.
“Federal law required the forms to be sent out by the end of January, and we’ve been providing consumers support since then,” he said. His employees have been answering tens of thousands of calls each day during this filing season. The top five questions being asked about Form 1095-A are the following, according to Morales:
1. Why did I receive this form?
2. What do certain terms, such as Second Lowest Cost Silver Plan, mean?
3. What do I do with this form once I’ve filled it out?
4. How can I use this form to file my 2014 tax return?
5. Is my 1095-A correct, and what do I do if it’s not?
“It’s a new process for consumers, and also for the Health Insurance Marketplace,” said Morales. “There are two groups of people who get the form. The first group is the people that signed up for health insurance in 2014 through the Health Insurance Marketplace and chose to get financial assistance through the Marketplace. If they received tax credits through the Marketplace, they use the form to reconcile the tax credits on their return with any advance payments they received.”
“The second group who receive Form 1095-A are folks who decided to enroll and purchased their insurance at full cost,” Morales added. “If they forego the credit during the year, they can still claim it on their return.” We explain the form to callers and give them a sense of why they got the form.
It gets a little trickier to explain the meanings of certain terms, especially the Second Lowest Cost Silver Plan (SLCSP), according to Morales.
“The IRS uses this to calculate the tax credits you are eligible for,” he said. It is entered onto the worksheet to determine whether the recipient overpaid or underpaid.”
The premium for the applicable SLCSP is the second lowest silver plan premium offered through the Marketplace that applies to the taxpayer’s coverage family.
”All of the information is prepopulated,” said Morales. “The information gets transferred to Form 8962, which is filed along with Form 1040.”
“Form 1095-A is sent by the Marketplace to the consumer and the IRS,” Morales added. “It stays with the consumers, who use it to complete Form 8962 to determine their premium tax credit eligibility.”
”If the Form 1095-A is incorrect, there is a process in place for the consumer to request a corrected form,” said Morales. “In New York, we contact the New York State Department of Health. They have a staff that works with the issuer to find if there are problems, and if so, they reissue a corrected form for the consumer. So far, it hasn’t been a big issue for us. We anticipate more inquiries about this as we get closer to the filing deadline.”
Although they may be befuddled at first, the majority of taxpayers can deal with the intricacies of the ACA, according to Morales. “Most consumers can grasp the information once we provide the support they need,” he said.