Washington Health Benefit Exchange

Tax Season & Healthplanfinder Update

Dustin Arnette, JD, CHCSenior Policy Analyst

Premium Tax Credits

▪ Premium tax credits lower an individual’s monthly premium▪ Generally available to those between 138-400% FPL who

purchase a QHP through the Exchange

▪ Two tax credit options:▪ Get it Now – advance credit payments (APTC)▪ Get it Later – get all (or some) of the credit on tax return

(PTC)

▪ APTC eligibility is based on the Marketplace’s estimate of the PTC you will be able to take on your tax return

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What’s the difference between APTC and PTC?

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Differences APTC PTC

When is it determined? When you submit your application

When you file your income tax redurn

Who makes the determination?

Exchange IRS

How is it calculated? Based on estimated household income and family size reported on your application

Based on actual household income and family size reported on your tax return

Who receives it? Issuer You

When is it paid? “In advance” on a monthly basis throughout the coverage year

At then end of the tax year

Reconciliation Flow

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What happens when you file your taxes?

▪ If you took advance payments of the tax credit, you will reconcile your tax credit▪ If APTC is more than PTC, the individual has received

excess APTC and must repay the excess (subject to certain limitations)

▪ If PTC is more than APTC, the individual will receive an increased refund for the difference (or reduction in tax payment due)

▪ If you did not take advance payments of the tax credit, you may claim all of your tax credit▪ Even if you did not seek financial assistance on your

application, you may be eligible for the premium tax credit

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Repayment Limitation▪ If HIPTC is more than PTC, the individual has received too

much HIPTC and must repay the excess

▪ Repayment is capped if income is less than 400% FPL*

* See 26 CFR § 1.36B-4

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Household income percentage of Federal

poverty line (FPL)Single taxpayer Married taxpayers filing

jointly

Less than 200% $300 $600

At least 200% but less than 300% $750 $1,500

At least 300% but less than 400% $1,250 $2,500

400% and above No cap (must repay entire amount)

No cap (must repay entire amount)

APTC and PTC Key Considerations

▪ Reconciling APTC is required▪ Advance payments of premium tax credit are optional

▪ Differences between APTC (estimate) and PTC (actual)▪ Changes in circumstances can affect the PTC amount and

eligibility for the PTC (even if not previously eligible)▪ Reporting changes will help ensure receipt of the proper

amount of APTC

▪ A tax return must be filed▪ If you received APTC or claiming PTC must file a Form

1040, Form 1040A, or Form 1040NR and attach Form 8962▪ Form 8962 cannot be filed with Form 1040EZ, 1040NR-EZ,

Form 1040-SS, or Form 1040-PR

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Your 1095-A Statement Webpage

www.wahbexchange.org/1095A

▪ FAQs

▪ 1095-A Correction Requests

▪ Tax Preparation Resources

▪ Translated resources

▪ 2014 Affordability Exemption Lookup▪ Lowest Cost Bronze▪ Second-Lowest Cost Silver▪ Federal Poverty Level

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Individual Shared Responsibility Provision

▪ Individual shared responsibility provision requires individuals to either:

▪ Have qualifying health insurance coverage (Minimum Essential Coverage),

▪ Obtain a health coverage exemption, or

▪ Make a shared responsibility payment on tax return

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Exemptions

▪ Exemptions are available for a variety of reasons

▪ Exemptions are available from either IRS or HHS (or both) depending on the type of exemption▪ Hardship (HHS)

▪ Short coverage gap (IRS)

▪ Members of Indian Tribes (IRS or HHS)

▪ Non-citizens, not “lawfully present” (IRS)

▪ Note: Applications for exemptions for Washington residents exemptions are currently processed by the federal government, not WAHBE

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Individual Shared Responsibility Payment

▪ For 2014, the annual payment amount is:▪ The greater of:

▪ 1 percent of household income that is above the tax return filing threshold for the individual’s tax filing status, or

▪ Flat dollar amount, which is $95 per adult and $47.50 per child, limited to a family maximum of $285

▪ Payment is capped at the cost of the national average premium for a bronze level health plan available through the Marketplace▪ For 2014, the annual national average premium for a bronze level health plan

available through the Marketplace is $2,448 per individual ($204 per month per individual), but $12,240 for a family with five or more members ($1,020 per month for a family with five or more members). See Rev. Proc. 2014-46.

▪ The percentages and flat dollar amounts increase over the first three years▪ In 2015, the income percentage increases to 2 percent of household income and the

flat dollar amount increases to $325 per adult ($162.50 per child under 18)▪ In 2016, these figures increase to 2.5 percent of household income and $695 per

adult ($347.50 per child under 18)▪ After 2016, these figures increase with inflation

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Family Glitch

▪ Employer-Sponsored Insurance must:▪ Be Affordable▪ Meet minimum value standard (plan pays at least 60%)

▪ “Affordability” is based only on the cost of employee-only coverage▪ “Affordability” does not take into consideration the often

significantly higher cost of a family plan

▪ If spouse and dependents are not offered ESI, or if ESI is not “affordable,” then they may still receive financial assistance▪ May be eligible for Medicaid regardless

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Spring 2015 Special Enrollment Period

▪ Runs from February 17 to April 17, 2015

▪ Who is eligible?▪ Customers Who Were Unaware of the Tax Penalty▪ Existing Customers with Technical Issues

▪ Customers must request the spring special enrollment period by 4:59 PM on April 17th ▪ Must select a plan and submit a payment by 11:59 PM on

April 17th to secure 2015 coverage

▪ Detailed FAQs: http://wahbexchange.org/files/6414/2410/7065/Feb__17_to_April_17_SEP_FAQs_FINAL.pdf

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Contact Information

Dustin Arnette, JD, CHCSenior Policy Analyst, Washington Health Benefit Exchange

▪Address: P.O. Box 657, Olympia, WA 98507

▪Phone: 360.688.7795

▪Email: dustin.arnette@wahbexchange.org

▪Website: www.wahbexchange.org

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Appendix

Form 1040(U.S. Individual Income Tax

Return )

▪ Individuals receiving APTC (or those wanting to claim it on their tax return) must file Form 1040 (or Form 1040A or Form 1040NR )

▪ New lines on Form 1040:▪ Line 46 – If an individual must repay APTC:

▪ Line 61 – Claim of MEC or shared responsibility payment:

▪ Line 69 – If individual is entitled to PTC:

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▪ Form and Instructions: http://www.irs.gov/form1040

Form 1095-A (Health Insurance Marketplace

Statement)

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▪ Form and Instructions: http://www.irs.gov/form1095a

Form 8962 (Premium Tax Credit)

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▪ Form and Instructions: http://www.irs.gov/form8962

Form 8965 (Health Coverage Exemptions)

▪ Form and Instructions: http://www.irs.gov/form896519

Health Coverage Exemptions

▪ For additional information about how to get exemptions that may be granted by HHS, visit HealthCare.gov/exemptions

▪ For additional information about how to get exemptions that may be granted by IRS, visit http://www.irs.gov/uac/ACA-Individual-Shared-Responsibility-Provision-Exemptions

▪ More information: ▪ IRS Form 8965: http://www.irs.gov/uac/About-Form-8965 ▪ IRS Publication 5172 (Facts about Health Coverage

Exemptions): http://www.irs.gov/pub/irs-pdf/p5172.pdf

The information contained in this presentation is current as of 1/13/2015. For the latest information about tax provisions of the Affordable Care Act, visit IRS.gov/aca 20

Additional Resources

▪ The Internal Revenue Service has a dedicated page on IRS.gov for the Premium Tax Credit: www.irs.gov/uac/The-Premium-Tax-Credit

▪ Publication 5187: Health Care Law: What’s New for Individuals & Families: www.irs.gov/pub/irs-pdf/p5187.pdf

▪ Resources will also be updated regularly at: www.wahbexchange.org/1095A

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