Help Eligible Families Enroll in Health Insurance Coverage for 2015: What Tax Credit Outreach Campaigns Can Do
Click on the links below for responses to key questions about health insurance coverage and filing tax returns or download the pdf.
Even with the eventual successes in 2014, millions of Americans still have not obtained the health insurance for which they qualify. Between November 15, 2014 and February 15, 2015, people without coverage and those looking to change or renew their current health plans will have the opportunity to enroll in private health coverage for 2015. Medicaid enrollment can occur at any time.
As of July 1, 2014, with the recent addition of Michigan and New Hampshire, 27 states have now elected to expand Medicaid coverage, while other states continue to consider this.
Under the Affordable Care Act, families and individuals with incomes up to 133 percent of the federal poverty line may qualify for Medicaid. (The effective income limit is actually 138 percent of the poverty line because a portion of income is not counted.)
Household size 138% of federal poverty line
For example, a family of four with an income of $47,000, or about twice the poverty line, would be expected to contribute no more than 6.3 percent of its income, or about $246 a month, for a family “benchmark” health plan. Assuming a typical premium of $8,579 for this plan, their annual premium tax credit would be worth $5,627, paid on a monthly basis directly through the Department of Treasury to the insurance plan. The family could choose between various other plans to find different premium, co-pay and deductible levels that best meet its needs, but the credit amount would stay the same. Premiums can also vary according to age and use of tobacco. (Actual premiums must be found at the health marketplace sites. These sample families are estimated for Virginia. Find an estimate for your state at: www.kff.org/interactive/subsidy-calculator.)
By contrast, if a family of four with an income of $24,000, just above the poverty line, chose the same “benchmark” plan as the one above with a premium of $8,579, it would be expected to contribute no more than two percent of its income – about $40 per month. Its annual tax credit would be over $8,000. The Department of Treasury will make monthly payments of the credit in advance directly to the insurance plan, so the family doesn’t have to pay the full premium upfront all year and then wait to file a tax return to get the credit. Again, the family will have choices among plans, so their actual premium could vary from this, but the credit amount remains the same.
Single individuals also will qualify. For instance, if a person working full-time at the minimum wage earning $14,500 chose a “benchmark” plan costing $2,624, he would be expected to contribute about $24 per month – 2 percent of his income – and could receive a premium credit that covers over $2,200 of the cost of a plan that provides comprehensive coverage.
Cost-sharing. For consumers with incomes below 250 percent of the poverty line, the mid-price “Silver” plans offered by each marketplace provide additional subsidies for co-pay and deductible amounts.
New community assistance efforts provide unbiased, cost-free help to consumers in completing the application and enrollment processes. Each of these official community assisters are trained, certified and have systems and processes in place to protect the privacy of consumers. There are several types of community assisters that may be available in any given state. Each state’s health marketplace website (find it at www.HealthCare.Gov) provides contact information for these assisters, which vary slightly in how they are funded and services they provide. These include:
- “Navigators” — including community and consumer nonprofits, unions, and trade groups funded by health insurance marketplaces will have trained staff to help people sign up for insurance through the health insurance marketplaces and understand their options when selecting a health plan.
- “In-Person Assisters” — similar to navigators, will have trained and certified staff available to assist individuals with their applications and enrollment, funding is awarded by states or health insurance marketplaces.
- Certified Application Counselors — are entities that are trained and certified by Medicaid agencies and/or health insurance marketplaces. Health insurance marketplaces do not fund the work of these groups.
For further details, see: www.enrollamerica.org/resources/in-person-assistance.
- Advance Payment Reconciliation. Households that received advance payments of the premium tax credit in 2014 will have to file a tax return for 2014. Since the advance payments were based on an earlier estimate of the household’s 2014 income, this will need to be matched up with the final 2014 income reported on the return. Filers who qualified for a credit but opted to claim it on the tax return instead of in advance, or who received an advance credit for less than the full amount, will get a refund. Those who received advance payments for more than they ultimately qualified will owe IRS the excess as an overpayment, which will be subtracted from any other refund.
- Insurance Mandate. There is a monetary fee for failing to obtain health coverage in 2014 for all household members, assessed as a tax payment in the 2015 tax filing season. There are exemptions from this penalty if the gap in coverage is less than 90 days, if the worker has income below the tax filing requirement, if insurance plans were unaffordable under HHS rules, and in some other cases. Other types of exemptions are available but must be obtained from the state health insurance marketplace, often before the end of the tax year in which they seek to apply the exemption. Filers may need information about whether they qualify for an exemption, and whether they can obtain it through the tax return or how to obtain it from the state marketplace so that it can be considered for the tax return.
This fall, the IRS will make the necessary changes to tax forms and to VITA/TCE volunteer training and site procedures, so that free tax sites can assist filers in this process.
COVERAGE IN 2014
- Some people can still get coverage for 2014 — there are special enrollment periods for health coverage through the marketplaces for those who lose employer coverage mid-year, for example, or move to a new state.
- Medicaid and Child Health Insurance Program (CHIP) enrollment is available year-round.
- Consumers need to report changes to their projected 2014 income before the end of the year to avoid repayment of an advance premium tax credit or to help reduce their monthly premiums.
- Some consumers who enrolled in coverage for 2014 through the federal marketplace may now have received notices from the marketplace asking for documentation to resolve an inconsistency in the information that was provided at the time of application with the information the marketplace used to confirm that information. Inconsistencies are generally in regard to the income estimate for 2014 and/or in regard to citizenship/immigration status. Consumers have 90 days to respond (they can request extensions). The marketplace is currently sending reminder notices to those who received earlier notices to respond within 30 days. If the inconsistency is not resolved, the consumer’s advance payment to subsidize the cost of their premium will be reduced or could even be terminated. Outreach groups can help people respond with the appropriate information or refer them to one of the community assister organizations described earlier. For more detail, see: www.healthreformbeyondthebasics.org/resolving-inconsistencies-resource.
COVERAGE IN 2015
- Health coverage for 2015 is accessible through the open enrollment period: November 15, 2014 through February 15, 2015.
- Premium tax credits paid by the Department of Treasury in advance to insurance plans will be determined based on the worker’s projected annual income for 2015 and household size. Making an accurate income estimate and knowing how to report income and household changes during 2015 will be important to avoid receiving too large a premium tax credit in advance, which would result in a tax liability to the IRS after the 2015 tax return is filed. Households should also report decreases in income that would reduce their expected monthly premium contribution to a more affordable level, instead of waiting for a refund months later, especially if their decreased income is making it hard for them to afford their share of the premium.
In the fall, ramping up distribution of information about the new enrollment period becomes important:
- Consumer Assister Organizations. Providing information about the consumer assister organizations available to help with enrollment will again be imperative. Contact information from the past year may need to be updated.
- Renewing or Changing Plans. Those who enrolled in an ACA plan for 2014 will be notified by their insurance company if the plan will be available for renewal in 2015 and the cost of the premium. Consumers can choose to change plans and update their premium tax credits through the marketplace during the upcoming open enrollment period.
- Unresolved Inconsistency Notices. Those who could not resolve inconsistencies in their information for 2014 and had subsidies reduced or terminated may still qualify for subsidies in 2015 if they re-enroll.
- Give people you serve the contact information and website for the health marketplace in your state. Encourage them to use the services of the Navigators and other assisters in your area.
- Work with health care assisters in your area to see whether you can provide assistance to people to complete the marketplace application. Your organization may also be able to receive training for staff to become certified assisters.
- Hold an info session or workshop to inform clients what they need to know about the ACA and filing a tax return in 2015.
- Arrange to have enrollment assisters available at the tax site so that eligible uninsured clients can apply for coverage on the spot.
Even after the next enrollment period ends in February 2015, there are important messages to provide filers:
- At free tax sites, ask clients during intake whether they are uninsured, or if they recently enrolled. This is a chance to check in with those who did enroll earlier in an insurance plan whether there have since been important changes to their income or household size and whether they have reported the changes to the marketplace so that their 2015 premium tax credit and their own monthly contribution can be adjusted.
- Remind those who did enroll and receive a premium tax credit that they are required to file a tax return for the tax year in which they received the credit.
- Clients may qualify for Medicaid or CHIP enrollment at any time and can be referred to the marketplace or appropriate agency, as well as community assister organizations.
In the 2014 filing season, some VITA programs worked successfully to bring Navigators or other assisters to their sites to serve tax clients.
- In Minnesota, Tri-Cap offered clinics for the homeless that included haircuts, free food and navigators with computers to sign people up for health coverage.
- Community Action of Southern Indiana had three Navigators conduct outreach, education, and enrollment in five counties.
- The VITA Task Force of Arizona placed Navigators and Certified Application Counselors at multiple VITA sites.
Further background information is available from the Center on Budget and Policy Priorities. Visit CBPP’s dedicated website posting resources that may be helpful to you: www.healthreformbeyondthebasics.org.
Available here are the slide decks and recordings for previous webinar presentations covering the key issues about ACA coverage, including information on how the penalties for lack of coverage work, who is exempt and how to obtain exemptions.
• VITA Programs & the Affordable Care Act
• Health Reform Beyond the Basics Webinar Series Archive
• Health Insurance Premium & Subsidy Calculator
• ACA Tax Penalty Calculator
• Questions of the Day
CBPP continues to develop more materials to support free tax preparation programs seeking to assist their clients in 2015. Further webinar presentations will be announced in coming months.