ACA Update – May 2014: The IRS Completes ACA Tax Form Rules

In early May, the Internal Revenue Service (IRS) has provided the new public health insurance exchanges rules for reporting on the private health coverage they have sold.  This new batch of final regulations titled, “Information Reporting for Affordable Insurance Exchanges,” dictates how the exchanges will communicate whether they have enrolled consumers in individual qualified health plans (QHPs).

The exchanges will report the facts every month on Form 1095-A, and the IRS could set the due date for the first reports on or after June 15, 2104, but no earlier.  Health plans, exchanges, governmental agencies and QHP enrollees will use this information on form 1095-A in connection with the new premium subsidy tax credit program created by the Affordable Care Act (ACA). Consumers may use the ACA tax credit to pay for health coverage during the tax year, essentially a year or more before filing their tax forms.

Come 2015 when consumers file their 2014 tax forms, the IRS will use Form 1095-A information to determine the amount of the advance tax credits paid to the consumers’ QHP issuers with the amount of tax credits given to consumers.  IF the IRS paid out more in tax credits to the QHP’s than the consumers were supposed to get, many consumers will be asked to find the money to pay back the surplus credits.
 
This collection of “missing” credits might prove to be tricky when asking individuals to pay more as their records didn’t match the feds.  We plan to learn more about this issue as the IRS continues to publish these final regulations.

MBPA will keep you up to date as we learn more about this batch of new rules in addition to any other changes relating to the ACA.  Please contact our Government Relations team with any questions at (586) 393-8800 or by email at BBochniak@michbusiness.org.