02/24/2015
Yet another ACA glitch in the preparation of forms from those who bought health insurance on the market
Announcement was made late Friday that as many as 880,000 (Friday's number) of Form 1095-A issued to those who bought health insurance through the marketplace are incorrect. I have many clients who've purchased through the market in NJ (and elsewhere). Now I must make them go to healthcare.gov, sign into their account and see if they are one of the ones affected by the error. If they are, we are told corrected Form 1095-A will be sent "beginning of March". This holds up refunds, EIC, refundable child tax credits, application for income-sensitive repayment of federal student loans, to name just a few. Additionally, the calculations made to determine repayment for those who received subsidies are laughable. The federal poverty level for a family of two is $15,510 (this is based on 2013 information even though we are filing 2014 returns). They are allowed up to 400% of this or $62,040 before all of the subsidy must be paid back. From the returns I've prepared so far (and it is only February 22), those who fall between 135% and 400% are being hit hard with paying back hundreds of dollars....money which never went to them in the first place, but instead to profit-first health insurers. Compounding this is most of these taxpayers admit they don't even use their insurance because of the prohibitive out of pocket costs. I am having to explain the health insurance legislation to those taxpayers who signed up (to avoid the penalty - although many receive it anyway) and they are dumbfounded. The law seems to punish those who can least afford it. Where were CPAs when this legislation was under consideration? I would really like to know, especially as we (always seem to) consider (mostly) high-net worth estate and millionaire tax "problems".
