“INDIVIDUAL SHARED RESPONSIBILITY, PROVISION & PREMIUM TAX CREDIT” SESSION TWO: 11AM-12:30PM
Outreach & Enrollment Track Kentucky Primary Care Association Annual Conference 2015
ReportingHealthInsuranceCoverageforIndividualsandFamilies:
IndividualSharedResponsibilityProvision
InternalRevenueServiceRevisedAugust21,2015
TheinformationcontainedinthispresentationiscurrentasofAugust21,2015:
• VisitIRS.govfortaxformsandinstructions
• ForthelatestinformationabouttaxprovisionsoftheAffordableCareAct,visitIRS.gov/ACA.
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IndividualSharedResponsibility
ReportHealthCareCoverage
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ClaimExemptionfromCoverage
MakeSharedResponsibilityPayment
MinimumEssentialCoverage
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MECcoverageis:• Offeredbyanemployer,COBRAandretiree
coverage• PurchasedthroughprivateinsuranceorHealth
InsuranceMarketplace• Providedbygovernment-sponsoredprograms,
includingveteran’scoverage,mostMedicareandMedicaid
InformationStatements
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• Marketplace-Form1095-A,HealthInsuranceMarketplaceStatement
• Insurers-Form1095-B,HealthCoverage
• LargeEmployers–Form1095-C,Employer-ProvidedHealthInsuranceCoverageandOffer
Form8965HealthCoverageExemptions
SubmitForm8965withfederaltaxreturntoclaimcoverageexemptionsgrantedbyeithertheHealth
InsuranceMarketplaceorIRS11
CoverageExemptions
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• CoverageExemptionsonlyavailableatfiling
• CoverageExemptionsonlyavailablethroughtheMarketplace
• CoverageExemptionsfromMarketplaceorIRS
MakinganIndividualSharedResponsibilityPayment
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TaxpayerscalculateSRPifeveryoneonthereturndoesnothave:• MECforeverymonthoftheyear,or• ExemptionformonthswithoutMEC
Howisthe2015PaymentCalculated?
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• Fortheyear,basedonthegreaterofthecalculated:– percentageofincome(2%)or– flatdollaramount($325peradult)
•Limitedtomaximumof$975perhousehold
• Proratedformonthswithoutcoverage/exemption• Cannotexceedthenationalaveragepremiumfor
bronzelevelhealthplans
ReturnPreparerInterviewBestPractices
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• UseForm1095-A,BorCto– verifycoveragemonthsand– whoiscovered
• Determineeligibilityforexemption– MarketplaceECN– Incomebelowreturnfilingthresholdor– IRScoverageexemptions
CommonErrors
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• Eligibleforcoverageexemptionbutdidnotclaim– Incomebelowfilingthreshold– Notlawfullypresent– Coveragegaps
• MiscalculatedSRP• SRPondependentreturns
2015:WhatYouNeedtoKnow
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• Forms1095-A,BandC• ApplyforMarketplaceexemptionsearly• ISRPamountsincrease• 2016Marketplaceenrollment
–Nov1,2015toJanuary31,2016–SpecialEnrollmentPeriods
TheinformationcontainedinthispresentationiscurrentasofAugust21,2015:
• VisitIRS.govfortaxformsandinstructions
• ForthelatestinformationabouttaxprovisionsoftheAffordableCareAct,visitIRS.gov/ACA.
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Agenda
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• Background• Basicsofthepremiumtaxcredit• Eligibility• Howtofile• Reconcilingadvancepayments• Commonerrors• Resources
HealthInsuranceMarketplace
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• ProvidesinformationatHealthCare.govorstateMarketplacewebsite
• Enrollsindividualsinhealthcoverage
• Offersfinancialassistance
• IssuesForm1095-A,HealthInsuranceMarketplaceStatement
BasicsofthePTC
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• Refundabletaxcredit• MustbuyMarketplacecoverage
• MustfileForm8962toclaimthePTCandreconcileanyadvancepayments
PTCEligibility
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Mustmeetallofthefollowingrequirements:• Incomebetween100-400%ofFederalPovertyLine• Taxpayer,spouse,ordependentmustenrollin
Marketplacecoverageforamonththattheenrolleeisnoteligibleforcoveragethroughemployerorgovernmentplan
• Cannotbeclaimedasadependentbyanotherperson
• NotfileasMarriedFilingSeparatelyNote:Someexceptionsapply
2015IncomeLimitsarebasedon2014FPL
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OneIndividual:$11,670(100%FPL)-$46,680(400%FPL)
FamilyofTwo:$15,730(100%FPL)-$62,920(400%FPL)
FamilyofFour:$23,850(100%FPL)-$95,400(400%FPL)
AdvancePaymentsofPTC(APTC)
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• DeterminedbyMarketplacebasedonestimatedhouseholdincomeandfamilysize
• Paiddirectlytoinsurancecompanyonthetaxpayer’sbehalf
• MUST filetaxreturntoreconcile
ReportingChangesinCircumstances
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Examples:• Familysizeorfilingstatus
(family=personalexemptions)• Increase/decreaseinhouseholdincome• Gain/lossofhealthcarecoverageoreligibility• Movingtoanotheraddress
Important:ReportchangestotheMarketplacewhentheyhappen
HowtoclaimthePTC
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• Basedonactualannualhouseholdincomeandfamilysizereportedonthetaxreturn
• ClaimedontaxreturnusingForm8962– ReconcilesAPTC– Resultsineitherarefundablecreditorrepaymentofexcessadvancepayments
FormsneededtoclaimPTC
• Form1095-AfromMarketplace• Form8962toclaimandreconcilePTC/APTC• FileForm8962with1040,1040Aor1040NR
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Form1095-A,HealthInsuranceMarketplaceStatement
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• IssuedbytheMarketplace
• MustbeusedtocompleteForm8962
• Reportsmonthlyhouseholdcoverageinformation:§ Planpremium§ Applicablesecondlowestcostsilverplanpremium
§ APTC
Form8962-PremiumTaxCredit
FileForm8962withtaxreturnto:• claimthepremiumtaxcreditand• reconcileAPTC
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• DidyourclientreceiveForm1095-AfromMarketplace?•APTC•Verifycoveragemonthsandwhoiscovered•Multiplepoliciesissued
• Weretherechangesincircumstancesduringtheyear?•Married/divorced•Eligibleforgovernmentoremployersponsoredcoverage
•Monthswithoutcoverage
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ReturnPreparerInterviewBestPractices
2014FilingSeasonRecap
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• ReconcilingAPTC•Penaltyrelieffor2014
• Reportingchangesincircumstances• CorrectedForms1095-A
CommonErrors
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• ClaimedPTCbutfailedtoattachForm8962• DidnotreconcileAPTC
– Form8962,Part2,Lines11or12-23(ColumnF)
• Form1095-Adatanotcorrectlyreported– Form8962,Part2,Lines11or12-23(ColumnsAandB)
• Transposeddigits
CommonErrors
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• MiscalculatedMonthlyPTCAllowed– Form8962,Part2,Lines11or12-23(ColumnE)
• MiscalculatedRepaymentAmountofExcessAPTC– Form8962,Part3,Lines28&29
2015:WhatYouNeedtoKnow
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• Forms1095-Aand8962• ReportchangesincircumstancetotheMarketplaceifreceivingAPTC
• 2016Marketplaceenrollment–Nov1,2015toJanuary31,2016–SpecialEnrollmentPeriods