After many months of pressure from Senate Democrats, academics, and tax prepares to give individuals a chance to get coverage at the same time they file taxes, the open enrollment deadline has been extended once again. Individuals can now sign up for plans through HealthCare.gov through April to avoid tax penalties for not having coverage in 2015.
While the open enrollment deadline was just extended until the 22nd, it’s been extended again through April. And as many are scrambling to get health coverage, others are just learning that they may be one of the over 800,000 individuals who may have either received too much or too little in premium tax credits as they signed up for health insurance coverage.
This article covers details for the new open enrollment deadline and why it’s been extended, the error made on over 800,000 tax statements, and how these occurrences affect you.
Open Enrollment Deadline Extended
People who set to pay penalties for going uninsured in 2014 and are still uninsured as of now will be allowed to visit HealthCare.gov until the end of April, starting March 15. The site closed Sunday for most users and, regarding the changes announced Friday, people will still have to pay a partial penalty for the time they went without health insurance coverage in 2015. For individuals who were uninsured in 2014, they will face fines as well. However, many individuals qualify for exemptions.
Related: Individual Mandate FAQs on Fines, Coverage and Exemptions
Those who are not exempt and were still required to purchase health insurance coverage say the holidays and bad weather are to blame for missed opportunities to sign up for coverage. Furthermore, advocates for the extension worried that individuals who wait to file taxes in March or April wouldn’t be happy to learn about the fines for 2014 at the same time they find out they were locked out for another year.
This extension applies to the 37 states which currently use the federally-run HealthCare.gov Marketplace. Thirteen states currently run their own Marketplaces and have also announced they will extend sign-up for health insurance coverage through the end of tax season.
Related eBook: The Small Business Guide to Open Enrollment 2015
3 Million Could Have to Pay Back Government for Tax Credits Due to Error
While many are worried about deadlines and coverage, something else is happening: Health officials say around 800,000 tax documents containing errors were sent to individuals who signed up for coverage in 2014 and received premium tax credits to offset their costs.
Individuals will have to reimburse the government if it is decided they received too large of a premium tax credit. However, individuals can claim money back if they should have received a bigger premium tax credit. H&R Block Inc. estimates that as many as three million individuals who received premium tax credits for their health insurance coverage may have to refund money to the government (source). Premium Tax Credits are reconciled with actual earned income based on form 1095-A mailed by the Department of Health and Human Services. As many as 20 percent these forms had the wrong local premium listed.
Individuals are being notified of the mistake and those who haven’t already filed taxes will be told to wait to file for taxes until they get corrected statements. It is anticipated that a repeat of the extension will not occur next year.
How Does This Affect You?
If you’re one of the millions of individuals who have signed up for health insurance coverage already and received premium tax credits, you may be receiving something informing you if you either owe money to the federal government, or if they owe you.
If you have not signed up for health insurance coverage, and attest you didn’t learn about the health law’s requirement to carry insurance or pay the fine when you file taxes, you can still sign up and file your taxes.
Lastly, if you haven’t already filed for taxes, but utilized your premium tax credits when you signed up for health insurance coverage, wait to file your taxes until you get a corrected statement.
How Do You Reconcile Your Premium Tax Credit When Filing for Taxes?
As you file for 2014 taxes this year, and if you received premium tax credits, you’ll need to fill out a form (Form 8962) with information you received from the Marketplace on Form 1095-A. This form will come in the mail for you to include in your tax filing.
Read more: What’s New for 2014 Tax Returns
The open enrollment deadline has been extended to accommodate individuals who were unable to sign up for health insurance coverage. And thousands or even millions of other individuals who have filed for their taxes may learn they either will be reimbursed for overpaying on health insurance premium tax credits, or will have to pay back the government for receiving too large of a premium tax credit.
What questions do you have about the new open enrollment deadline and filing for taxes this tax season? Comment below.
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