Covered California has released a variety of documents to help tax payers enrolled in their health plans report the Advance Premium Tax Credits (APTC) on their federal 2014 tax return. The guidance from Covered California discusses the IRS Form 1095-A Marketplace Statement the tax payer will receive, using it to fill out Form 8962 Premium Tax Credit reconciliation and ultimately report it on either Form 1040 or 1040A. The released documents also detail how to download Form 1095-A and request a corrected Marketplace statement if there was an error.
Covered California guidance on IRS 1095-A
Covered California has one function when it comes to helping tax payers report and reconcile any ACA health insurance advance premium tax credits and that is to issue Form 1095-A Marketplace Statement. This statement is similar to a W-2 or 1099 tax payers receive to report income or wages. The 1095-A reports the monthly amounts of tax credit subsidy that was forwarded on the individual or families behalf from Covered California to the selected health plan or insurance company. Click the links to open, view and download the files.
- IRS Form 1095 Talking Points For Service Channels Rev 2 20
- IRS Form 1095 Talking Points For Service Channels CC
- IRS Form 1095 FAQs For Service Channels Rev 2 20
- IRS Form 1095 FAQs For Service Channels CC
- Job Aid - Form 1095-A CC
- Medi Cal Tax Filing FAQs 1 16 15
- 1095-A Dispute Form Covered California
Highlights of Covered California guidance for IRS forms
In addition to the fundamentals of the 1095-A, the Covered California documents try to give a broad overview of all the different IRS forms used with the federal tax returns. Most of this information can also be found in IRS publication also.
IRS Form 1095 Talking Points for Service Channels
This document gives the background, rational and sequence of how the whole ACA health insurance tax credit reporting works. It is really meant as a primer on the whole subject of the premium tax credits and who will or won’t receive a 1095-A and why. While it is written for Covered California staff members on how to educate consumers about the 1095-A, it is a good overview for any tax payer who wants to understand how the system works. This is a good excerpt on who won’t receive a 1095-A.
o Covered California will not issue an IRS Form 1095-A to consumers who are enrolled in a Minimum Coverage Plan (Catastrophic plan) or who purchased health plans through Covered California’s Small Business Health Options Program (SHOP).
o Department of Health Care Services (DHCS) will not issue an IRS Form 1095-B to consumers who are enrolled in the Medi-Cal Program for the 2014 calendar year.
o Consumers who were enrolled in either a Minimum Coverage Plan or in Medi-Cal for the whole 2014 calendar year will not need to complete the IRS Form 8962 since they were not eligible for premium tax credits (premium assistance).
o Consumers who were enrolled in both a health insurance plan through Covered California and in Medi-Cal will only receive an IRS Form 1095-A that reflects the Covered California coverage.
Consumers may receive multiple 1095-A’s
- Enrolled in more than one health plan during 2014
- Metal Tier level changed during the year
- Household members enrolled in different exchange health plans
IRS Form 1095 FAQs for Service Channels
Thirteen pages of almost every question imaginable about the 1095-A a consumer may ask. This really needs to be in a flow chart format, but it would probably look like a spider web or impossible maze. There are some good nuggets of information such as question 22.
What if my actual income is lower than I estimated and makes me eligible for Medi-Cal?
If your tax household income ends up being low enough to make you and/or your family eligible for Medi-Cal, you will not have to pay back any APTC you received during the year.
You should report a change in income once you realize the estimate you gave when you applied for health insurance was not correct.
The document also discusses the dreaded SLCSP or Second Lowest Cost Silver Plan from Form 1095-A. Unfortunately, it looks like their example calculation with the SLCSP has a typo in the Monthly Fair Share contribution, unless $2.32.61 is new dollar figure I’m unfamiliar with.
Job Aid Form 1095-A
This document discusses how consumers will receive Form 1095-A and how to download it from their secure mailbox in the Covered California Accounts. It also reviews the 1095-A notification letters (CalNOD62A) being sent out to Covered California members about the 1095-A which is printed in multiple languages. It also highlights each of the rows and columns of the 1095-A and tells the tax payer which each column represents.
You can download the other letters in various languages in the Download File Tree under Covered California>IRS Tax Credit Forms.
Little discussion of Form 8962
The disappointing part of all of the guidance is that Covered California never shows what a sample 1095-A might look like with all the different dollar amounts filled in. They also avoid referencing Form 8962 Premium Tax reconciliation form and how that might be filled out properly. They are so worried about being seen as giving tax advice that they fail to give the full ACA tax credit picture. Some people will have to pay back part, if not all, of the tax credits they received during the year because their Modified Adjusted Gross Income is too high for the tax credits. Perhaps the best guidance given was by the IRS in an earlier notification, “Using tax preparation software is the best and simplest way to file a complete and accurate tax return as it guides individuals and tax preparers through the process and does all the math.”
Issue Number: HCTT-2015-01
Health Care Law Brings Changes to IRS Tax Forms
Here is information about the new forms and updates to the existing forms:
Form 8965, Health Coverage Exemptions
Complete this form to report a Marketplace-granted coverage exemption or claim an IRS-granted coverage exemption on the return.
Use the worksheet in the Form 8965 Instructions to calculate the shared responsibility payment.
Form 8962, Premium Tax Credit
Complete this form to reconcile advance payments of the premium tax credit, and to claim this credit on the tax return.
Additionally, if individuals purchased coverage through the Health Insurance Marketplace, they should receive Form 1095-A, Health Insurance Marketplace Statement, which will help complete Form 8962.
Line 46: Enter advance payments of the premium tax credit that must be repaid
Line 61: Report health coverage and enter individual shared responsibility payment
Line 69: If eligible, claim net premium tax credit, which is the excess of allowed premium tax credit over advance credit payments
Line 29: Enter advance payments of the premium tax credit that must be repaid
Line 38: Report health coverage and enter individual shared responsibility payment
Line 45: If eligible, claim net premium tax credit, which is the excess of allowed premium tax credit over advance credit payments
Line 11: Report health coverage and enter individual shared responsibility payment
Form 1040EZ cannot be used to report advance payments or to claim the premium tax credit