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Thousands Get Wrong Health Coverage Information from the Marketplace

About 80,000 tax filers who used the federally-facilitated Marketplace coverage last year and used tax credits to lower their premium received wrong information on their Form 1095-A. Luckily, most of them haven’t filed their tax returns yet. They await the updated form with the corrections from the federal government.

irs amended return

The estimated date of receiving the updated form is the beginning of March. Those who filed their return using the wrong information will probably need to file an amended return if the IRS or the Treasury Department does not come forward to offer help. The Centers for Medicare and Medicaid Services (CMS), however, stress that this won’t be a problem for those that received healthcare coverage through Healhtcare.gov. Accounting Today tries to make sense of the mess and how taxpayers can help themselves:

Form 1095-A “includes important information needed to complete and file their tax returns. One piece of information included on the 1095-A is the premium amount for the ‘second lowest cost Silver plan’ in the taxpayer’s area. This premium amount represents the benchmark plan used to determine the amount of premium tax credit they were eligible to receive. Unfortunately that information was calculated incorrectly for many taxpayers, although CMS stressed that it won’t be an issue for the majority who received health coverage through Healthcare.gov.

“‘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,’ said CMS. ‘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.’

“CMS noted that taxpayers whose forms were affected will receive a phone call about the problem from the Marketplace by early March, in addition to letters and emails with additional information about the status of their forms.

“Taxpayers who are concerned about the status of their 1095-A forms can find out if they are affected by logging in to their account at HealthCare.gov. They will see a notice message that will let them know if their form was or was not affected. Approximately 80 percent of tax filers with Marketplace coverage through HealthCare.gov who received a 1095-A will find that their form was not affected by the issue, according to CMS, and will be able to file their taxes with their current form.

“If their form was affected, CMS advised them to wait to file their tax return until they receive a corrected 1095-A Form from the Marketplaces. New forms will be sent from the Marketplace beginning in early March and taxpayers will also receive a message in their Marketplace account on HealthCare.gov.

“If taxpayers need to file their taxes before them, CMS is making available a tool to help them determine the correct amount of the second lowest cost Silver plan that applied to their household in 2014. They can also call the Marketplace Call Center at 1-800-318-2596 (TTY: 1-855-889-4325) for assistance.”