“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

ReportingCoverage

ü  Checkboxandleaveentryspaceblankifeveryoneonthereturnhadcoverageforthefullyear

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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

Form1095-A

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Form1095-B

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Form1095-C

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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

Resources

• IRS.gov/TaxPros• IRS.gov/DraftForms• IRS.gov/Form8965(linkstoFormanditsinstructions)

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InternalRevenueServiceRevisedAugust21,2015

ABC’softhePremiumTaxCredit

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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Completing Part1ofForm8962

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Completing Part2ofForm8962

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Completing Part3ofForm8962

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Part4&5ofForm8962

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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

Resources

•  IRS.gov/TaxPros•  IRS.gov/DraftForms•  Publication974–PremiumTaxCredit•  InstructionsandForm8962,PremiumTaxCredit

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