If you signed up for coverage through the federal Health Insurance Marketplace last year, you should have received a statement in the mail in February from the Marketplace called a Form 1095-A. This statement includes important information you need in order to complete and file your tax return. One piece of information included in your 1095-A is the premium amount for the “second lowest cost Silver plan” in your area. This benchmark plan premium amount is used to determine the amount of premium tax credit you were eligible to receive.
Many Taxpayers Received Incorrect Information
The Centers for Medicare and Medicaid Services (CMS) estimate that approximately 800,000 taxpayers received incorrect information from the Marketplace, however. This means that about 20 percent of the taxpayers who had federally-facilitated Marketplace coverage in 2014 and used tax credits to lower their premium costs will soon receive an updated Form 1095-A, because the original version they were issued listed an incorrect benchmark plan premium amount.
Good News, Bad News
The good news is that most taxpayers haven’t filed their tax returns yet. If your tax return is a work-in-progress, the CMS recommends waiting until the first week of March when you receive an updated 1095-A form.
The bad news is that approximately 50,000 of the affected taxpayers have already filed their returns. On Feb. 24, the Treasury Department announced, “The IRS will not pursue the collection of any additional taxes from these individuals based on updated information in the corrected forms.” However, the Treasury recommends discussing the situation with your tax adviser if you were penalized by a mistake on Form 1095-A. If the difference is significant, you may opt to file an amended return.
If you have not received your 1095-A form, you can also download a copy through your HealthCare.gov account. Be sure to check the information on your forms — such as the number of people in your household — for accuracy. If you find an error, contact the Marketplace Call Center at 1-800-318-2596 or your tax professional to find out how to request a corrected form.
Contact Your Tax Pro
It’s important to note that this issue doesn’t affect the majority of Marketplace consumers. It affects only about 20 percent of the people who signed up through one of the 37 states using HealthCare.gov. This issue also doesn’t mean that consumers received the incorrect amount of tax credit throughout the year.
Feel free to contact your tax adviser regarding the accuracy of information contained on your Form 1095-A and ways to remedy a 2014 tax return that’s already been filed using incorrect 1095-A information.