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Monday, February 2, 2015

Insurance Mandate Tax Tips and Report Card on Performance

One Year Out From the Inaugural Insurance Exchange Launch
Now that the nation has passed its second enrollment in the Affordable Care Act (ACA) Insurance Exchanges, it is time to do a bit of a scorecard and though the second enrollment went well, let's look as the predictions versus the actual participation.
Original Whitehouse Projections Versus Actual Enrollment

Number expected to gain insurance coverage because of either the employer or individual insurance mandates under the ACA-32,000,000
Since the employer mandate is just starting this year and the phase-in penalty for firms without compliant medical plans only applies to firms with 100 or more eligible employees, it is not possible to discern the total reduction in the uninsured yet. But here is the rate of the uninsured as a proportion of the national population.
Uninsured rate prior to ACA- 18% After ACA-12.9%
Number Health & Human Services projected for the 2015 Insurance Exchange Enrollment-9,100,000

Number of the uninsured who obtained coverage through Medicaid or an Exchange product-9,500,000, which exceeded their projection by 4%. This information  may be found at:

Number enrolled in the federal insurance exchange-7,100,000
Number enrolled in private insurance exchanges-2,400,000

Percentage of  Actual Enrollment compared to the Eligible Enrollees
I reviewed the Kaiser Family Foundation's report on the insurance exchange enrollment by state and it was no surprise there was a lot of variation, with a low enrollment in the states with robust economies, such as North Dakota (13%) and Massachusetts (8%). Whereas, 87% of the population deemed eligible to enroll in the insurance exchange in Vermont actually did. For more information go to the Kaiser Foundation web site at:

Income Tax Tips for Insurance Exchange Participants
For my followers, I have been tweeting tax tips regarding the reconciliation of the government tax credits for those who purchased insurance through the exchanges. To assist those who are filing income taxes, here is a step-by-step guide to the insurance mandate and tax credit posting:
  1. If you purchased medical insurance through an insurance exchange, either federal or state, you may have received an advance from the federal government, to pay for part of your insurance premiums. If you enrolled in Medicaid through an exchange you did not have to pay any premiums and this does not apply to you..
  2. The government advance, which went directly to the insurance company, was an estimate of your tax credit eligibility based on the income and family information you provided at enrollment in the previous year. If your status changed, there may be a difference in the amount the government advanced and what you should have received. 
  3. Your insurance exchange should have distributed form 1095-A by January 31st, assuming they have your current contact information. You will need this form to complete your income tax.
  4. Form 1095-A has a monthly break-down of your insurance premiums for the 2014 year, both the amount you paid, the amount of the tax credits, which is what the government contributed to the cost of the insurance (thank you Uncle Sam), and the total premium.
  5. If you are using an electronic tax preparation tool, which I highly recommend, it will have an insurance page or folder, which will walk you through the form. But just in case you are still old school and use paper returns, the federal tax credits which were used to pay for your insurance will be entered into the Premium Tax Credit form 8962 of your 1040 Personal Income Tax Return. 
  6. Enter your total premiums paid, total premiums credited from the government and wait until you complete your return. After you have entered all of the other information to complete your income tax return you will you have a final result in terms of what your tax credits should have been and what they actually were. If the government estimated too high, then you might owe some money. If the government estimated too low, then you will have a refund coming.
  7. For example-Total insurance premiums were $7,032 for a single individual (yikes) and you paid $348, with the government contributing the rest. The government paid $4,716, but it turns out you were only eligible for $4,368 in credits. This means you owe the difference between the two or roughly $348. This government advance will be deducted from your tax refund or theoretically, you will get a statement saying you owe income taxes.
  8. Bottom line, the federal tax credits were an estimate of what you were eligible for, based on information you provided, and not a guarantee, so expect some variation in the actual result. If the government gave you $4,716 and you only had to give back $600, that is still awesome.
Hopefully this helps some of you with your income tax filing for the 2014 year. This information is not meant to give tax or legal advice (CYA-disclaimer) but is a journalist's view on publicly available information. Feel free to share this with everyone, with appropriate attribution of course.
And this is the healthpolicymaven signing off. Viva Le France!

healthpolicymaven is a trademark which has been in continuous use sine 2007 and is the property of Roberta E. Winter, MHA, MPA, President of Praevalere Inc.



Connie Simoni said...

Another excellent blogg written in clear understandable language and with this subject that is pretty exceptional! I get it!

Jennifer Davies said...

Thanks for the explanation. Even with all the talk about health insurance today, I'm still confused about the specifics. It's nice to have things completely broken down for people like me, who won't understand them otherwise. It's a complicated topic, but it's too important to ignore.