Tax Season Topics & SEP Pre-verification Update

February 8, 2018

The webinar will begin at noon. If you can see this screen and hear the music you are prepared to participate.

The webinar is not being recorded, but this PowerPoint will be available on the Broker OneStop.

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Assisters will have basic knowledge of MNsure-related tax issues and will understand their appropriate role in assisting consumers.

This presentation will cover the following topics and includes links to resources for more information:

Individual shared responsibility payment

Exemptions from the mandate

Reporting coverage when filing taxes

Tax credit reconciliation

Filing requirements by program eligibility

Assister role in helping consumers

Tax assistance resources

Objective

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The ACA requires that nearly all Americans must:

have health insurance coverage that meets a minimum standard (minimum essential coverage, or MEC),

qualify for an exemption,

or pay a penalty when filing their tax return.

Affordable Care Act “Mandate”

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The requirement to have health insurance coverage is still in effect for 2017 and 2018: If a consumer does not have health insurance in 2017

or in 2018 and does not qualify for an exemption, they will have to pay the federal tax penalty

The repeal of the mandate included in the federal tax bill will be in effect in January 2019.

For 2017 and 2018 tax filing, the penalty is the greater of: 2.5% of the amount of any taxable income that

exceeds their tax filing threshold amount, or $695 per adult and $347.50 per child (up to a

maximum of $2,085)

Individual Responsibility Payment

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The Internal Revenue Service (IRS) stated that for Tax Year 2017, it will not accept tax returns when the tax filer has failed to indicate whether or not they had health coverage during the previous year.

If a tax filer did not indicate that they had health coverage during the previous year, and did not qualify for an exemption from the individual shared responsibility payment, the tax filer will owe a penalty.

For more information, refer consumers to a tax professional and to the IRS webpage on the Individual Shared Responsibility Provision.

Individual Responsibility Payment

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Individuals may qualify for an exemption and do not owe a penalty if they: Are not required to file a tax return because their income is too

low Cannot afford the coverage that is available through their

employer Have suffered a hardship Were uninsured for no more than 2 consecutive months Were incarcerated Members of a federally recognized tribe or eligible for services

through an Indian Health Services provider Members of a religious group that objects to health coverage Members of a recognized health care sharing ministry

Exemptions from the Mandate

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Depending on the type of exemption, a consumer will apply using:

The Federal Health Insurance Marketplace (more information at Healthcare.gov)

When they file their federal tax return (more information at www.irs.gov)

Applying for an Exemption

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Unaffordable Coverage through MNsure

Consumers will need plan premium information from MNsure to apply for the exemption for unaffordable coverage through MNsure:

Claim exemption for past months (2017) – claim when filing 2017 taxes using federal Form 8965. Premium information is available from MNsure.

Instructions for how to look up premium information are available online at: https://www.mnsure.org/new-customers/whatis-mnsure/mandate/exemptions/index.jsp

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Reporting Coverage (Form 1095)

Tax filers who had minimum essential coverage (MEC) for each month of the tax year indicate this by checking a box on Form 1040, 1040A or 1040 EZ.

Individuals who have MEC will receive one or more Form 1095s which provide proof that an individual complied with the ACA: 1095-A – Issued by MNsure if members of a family were

enrolled in a QHP through MNsure during 2017. 1095-B – Issued by DHS if members of a family were enrolled in

Medical Assistance or MinnesotaCare in 2017. 1095-B/1095-C – Issued by health insurance companies or

employers if members of a family were enrolled in MEC in 2017.

All 1095-A and 1095-B forms have been sent to consumers.

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Form 1095-A

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Reporting Coverage (Form 1095)

Missing a Form 1095-A? If a consumer has not received their form by February 15, and it is not available in their online account, call the MNsure Contact Center to report this.

Missing a Form 1095-B? Enrollees do not need to wait to get their Forms 1095-B to file their 2017 federal tax returns. If an enrollee doesn’t get a form and believes he or she should have, contact the following agencies: Anyone with Medical Assistance, contact the county or tribal

human services agency. Anyone with MinnesotaCare, call MinnesotaCare at 651-297-

3862 or 800-657-3672. Unsure of coverage, call the Minnesota Health Care Programs

Member Help Desk at 651-431-2670 or 800-657-3739.

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Individuals will need the information on Form 1095-A to reconcile advanced premium tax credit payments made on their behalf or to claim the premium tax credit if they are eligible. Individuals do not need to file Form 1095-A with their

taxes. Individuals do need information from Form 1095-A to

complete and file Form 8962 (Premium Tax Credit).

Tax Credit Reconciliation: Assisted QHPs

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Consumers who enrolled through MNsure can claim a premium tax credit when filing their taxes even if they applied “without financial help.”

If APTC payments were not applied to the enrollee's QHP coverage for any month during 2017, and the QHP enrollee now wants to claim the premium tax credit for 2017, the enrollee needs to: file Form 8962 (Premium Tax Credit). calculate the second lowest cost silver plan premium using

MNsure’s plan premium look-up tool. https://www.mnsure.org/current-customers/tax-info/report-credit/slcsp-howto.jsp

Tax Credit Reconciliation: Unassisted QHPs

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Changes in circumstances could affect the actual premium tax credit amount:

Individual could receive a premium tax credit (would increase refund or lower amount of tax they would otherwise owe).

Individual may need to repay advanced premium tax credits (would result in a smaller refund or a larger balance due).

Tax Credit Reconciliation

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If an individual needs to repay advance premium tax credits (APTC), the amount may be limited. See IRS form 8962 and instructions

Repayment Limitations

Repayment Limitation Table for 2017Household Income Percentage of Federal Poverty Line

Limitation amount for Single

Limitation amount for all other filing statuses

Less than 200% $300 $600At least 200%, but less than 300% $750 $1,500At least 300%, but less than 400% $1,275 $2,550400% or more No limit No limit

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Medical Assistance and MinnesotaCare: Getting Form 1095-B does not mean that an enrollee is required to file a federal tax return. Enrollees should check IRS.gov and the Form 1040 instructions to determine whether they must file a federal income tax return. An enrollee who files taxes does not need to attach Form

1095-B to his or her tax return. The enrollee should keep the form for his or her records.

An enrollee who does not file a 2017 federal income tax return should also keep Form 1095-B for his or her records.

Federal Tax Filing Requirements

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QHPs: Consumers who purchased a QHP through MNsure and are receiving APTCs, or wish to claim the premium tax credit (PTC), must file taxes with the Internal Revenue Service (IRS).

If they fail to file taxes, they will not be eligible for premium tax credits in the future.

In addition, the IRS may contact a consumer to pay back some or all of the 2017 advance payments of the premium tax credit.

Federal Tax Filing Requirements

Assister Role in Helping Consumers

Assisters should not provide advice to consumers on tax issues in their assister role.

Assisters may share information and resources with consumers so they are aware of their responsibilities.

We strongly recommend you refer consumers to tax professionals. Free tax assistance is available for low-income consumers: Prepare and Prosper (eight Twin Cities sites):

www.prepareandprosper.org

Other free tax preparation sites (open Feb 1 – April 15): http://www.revenue.state.mn.us/individuals/individ_income/Pages/Free_Tax_Preparation_Sites.aspx

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New for this year, MNsure has created a 1095-A Guide for Assisters 2018, which walks assisters through information that they will find useful in helping consumers with questions about their 1095-A forms. Topics include• An Overview of the 1095-A form• How to mail and access a 1095-A• How answer consumer questions about their 1095-A • Examples of the different versions of the 1095-A a

consumer might receive and the accompanying notices

The guide can be found on the document library on Assister Central

1095-A Guide for Assisters 2018

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Deadlines and penalties: Calculating penalty amounts: https://www.irs.gov/affordable-care-act/individuals-and-families/aca-individual-shared-responsibility-provision-calculating-the-payment

Exemptions (including unaffordable coverage through MNsure): https://www.mnsure.org/new-customers/whatis-mnsure/mandate/exemptions/index.jsp

HealthCare.gov exemption tool: www.healthcare.gov/exemptions-tool

IRS exemption information: www.irs.gov/Affordable-Care-Act/Individuals-and-Families

IRS Q&A on Form 1095: www.irs.gov/Affordable-Care-Act/Questions-and-Answers-about-Health-Care-Information-Forms-for-Individuals

Resources

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MNsure information about IRS Form 1095-A: Main page: https://www.mnsure.org/current-customers/tax-info/form-

1095a/index.jsp FAQs: https://www.mnsure.org/current-customers/tax-info/form-

1095a/form-1095a-faq.jsp

DHS information https://mn.gov/dhs/people-we-serve/adults/health-care/health-care-programs/programs-and-services/irs-form-1095-b.jsp

Claiming and reconciling premium tax credits: https://www.irs.gov/affordable-care-act/individuals-and-families/premium-tax-credit-claiming-the-credit-and-reconciling-advance-credit-payments

Free tax preparation assistance: www.prepareandprosper.org http://www.revenue.state.mn.us/individuals/individ_income/Pages/Fre

e_Tax_Preparation_Sites.aspx

Resources (continued)

New SEP Pre-verification Process

Starting March 1, 2018, MNsure is implementing pre-enrollment verification for certain SEP enrollments for plan year 2018.

Pre-enrollment verification requires MNsure to hold certain SEP enrollments received until the applicant/ enrollee provides documentation proving their qualifying SEP event.

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SEP Pre-verification Process

Current state: MNsure sends the enrollment to the health insurance company, and then will send a notice to the carrier, terminating the consumer’s coverage if the consumer does not provide the correct verifications within the allotted time. MNsure also sends a notice to the consumer informing them of the status of their enrollment.

Future state (starting March 1): MNsure waits to send the enrollment to the health insurance company until after the consumer has submitted the verifications, and MNsure has verified that the verifications meet the requirements for the SEP.

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SEP Pre-verification Process

No new verifications requirements as a result of this process. MNsure will require pre-enrollment verification for only those SEP events where MNsure already requires proof.

Pre-enrollment verification will apply for both new and existing enrollees.

In addition to any verbal confirmations that enrollees will get from the Contact Center, enrollees will also receive a written request for proof and a written notice of the final enrollment determination based on if verification was provided or not provided.

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SEP Pre-verification Process

SEP events where MNsure requires proofs: Loss of MEC – other than MA/BHP

Gain of access to new QHP due to permanent move

Marriage

Birth, adoption, or placement for adoption or foster care, or through court order

Loss of dependent due to death or divorce

Gain of citizenship/lawful present status

Release from incarceration

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SEP Pre-verification Process

1. If required, a SEP verification request is triggered upon determination of SEP eligibility.

2. Consumer will call the Contact Center to determine eligibility for the SEP, at which time the Contact Center will inform the consumer whether or not verifications are required.

3. Enrollees will have 30 days from date verification request is triggered to resolve the verification request. Upon request for verification, proof must be submitted within 30 days or the enrollment will expire.

4. Enrollees will receive both a written request for proof and a written notice of the final enrollment determination based on if verification was provided/sufficient or not provided/not sufficient.

5. The enrollment will be processed and sent to health insurance company upon receipt of acceptable verification documents

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SEP Pre-verification Process

When an enrollee is required to pay two or more months of retroactive premiums in order to effectuate coverage, the enrollee must be given the option to start coverage based on the original effective date or move the start ahead no more than one month.

If the consumer is eligible for this option, they have 14 days to call MNsure to change their plan’s effective date.

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SEP Pre-verification Process

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Thursday, March 8

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