Statements by Secretary Lew and Secretary Burwell on how the Affordable Care Act and Health Insurance Marketplace will impact tax returns

[January 09, 2015]  In preparation for the 2015 tax filing season, the U.S. Department of Health and Human Services and the Treasury Department are putting in place resources to provide tax filers with the information and resources they need to get their questions answered.

Millions of Americans who get their health insurance through work are benefitting from the Affordable Care Act, and millions of others have signed up for the Health Insurance Marketplaces and received financial assistance to lower their monthly premiums.

Starting this year, consumers will see some changes to their tax returns. While the vast majority of tax filers – over three quarters – will just need to check a box on their tax return indicating they had health coverage in 2014, people who have coverage through the Marketplaces, or decided not to enroll in coverage, should be aware of some additional steps that will be a part of the tax filing process starting this year.

Consumers will have questions about this new process and the Administration is committed to providing the information and tools tax filers need to understand the new requirements. In the coming weeks, the Administration will launch additional resources to help consumers prepare for tax filing season, including online tools to help individuals connect with local tax preparation services and determine if they are eligible for an exemption.

Treasury Secretary Jacob J. Lew and Health and Human Services Secretary Sylvia M. Burwell released the following statements today providing an overview of the consumer support and guidance their agencies will provide:

Treasury Secretary Jacob J. Lew:

“For the vast majority of Americans, tax filing under the Affordable Care Act will be as simple as checking a box to show they had health coverage all year. A fraction of taxpayers will take different steps, like claiming an exemption if they could not afford insurance or ensuring they received the correct amount of financial assistance. A smaller fraction of taxpayers will pay a fee if they made a choice to not obtain coverage they could afford. We are working to ensure that whatever their experience, consumers can easily access clear information since this is the first year they will see certain changes to their tax returns.”

HHS Secretary Sylvia M. Burwell:

“Last year, millions of Americans purchased quality, affordable health coverage through the Marketplace, and the vast majority received tax credits that cut their monthly premiums. This benefit, which in many cases helped make the cost of health care less than the cost of a cell phone or cable bill, enabled these consumers to enjoy the benefits of coverage throughout the year. In the coming weeks, HHS will work with other agencies, tax preparers and community organizations to arm these consumers with the information they need to know as they prepare to file their taxes. We will also be providing helpful tools so that the millions of taxpayers who qualify for an exemption can receive one.”

While including health insurance information will become a routine step in filing taxes, this is the first time families will be asked to answer basic questions regarding their health insurance on their tax returns. Most consumers – over three quarters – just need to check a box to indicate they have coverage. Those with Marketplace coverage will receive a new form in the mail from the Marketplace – Form 1095-A – that they will use to reconcile their upfront financial assistance. While those who can afford to buy health insurance and choose not to will have to pay a fee, individuals who cannot afford coverage or meet other conditions can receive an exemption.

In the coming weeks, consumer-friendly tools and resources will be made available for those tax filers who have health coverage through the Marketplaces, those seeking an exemption, and those looking for information about the fee for those who could afford to purchase health coverage but chose not to. General resources can be found at www.IRS.gov/ACA  or https://www.
healthcare.gov/taxes/.  A sampling of some of resources already available, include:

IRS: Health Care Law: What’s New for Individuals & Families (Pdf)

HHS: 3 Tips About Marketplace Coverage and Your Taxes (Pdf)

HHS: No Health Coverage? What That Means for Your Taxes  (Pdf)

To reach consumers with the information they need to prepare for the upcoming tax season, the Administration will employ a variety outreach strategies. Outreach and consumer education efforts will include:

• Direct outreach to Marketplace enrollees. Through email, phone, and text messages the Administration will reach out to people who got coverage through the Health Insurance Marketplace with personalized information that is most relevant to their tax status. We will focus on providing targeted messaging to consumers who benefited from an advanced premium tax credit last year to help them offset the cost of their Marketplace premiums.

Community-based outreach and in-person assistance. Working with community organizations on the ground, nonprofit organizations, Marketplace navigators and other in-person assisters, we will provide guidance and resources to consumers looking for answers.

[U.S. Department of Health & Human Services]