ACA Tax Filing: Considerations for HIV/AIDS Programs. Amy Killelea, NASTAD February 18, 2015

Transcription

1 ACA Tax Filing: Considerations for HIV/AIDS Programs Amy Killelea, NASTAD February 18, 2015

2 Webinar Etiquette Phone lines Lines will be muted until dedicated question time. Please do not put your call on hold. Verbal Questions There will be dedicated time for questions. Please wait until the Q & A section to ask questions on the phone. Please identify yourself when asking a question or providing a comment. Written Questions Participants have the ability to submit written questions during the webinar using the Chat function Evaluation Following the webinar, participants will have the opportunity to complete a brief survey to provide feedback on the webinar.

3 Presentation Outline 1. Premium tax credit reconciliation 2. Claiming an exemption from the individual mandate 3. ADAP policies and best practices

4 Premium Tax Credit Reconciliation

5 Life Cycle of Premium Tax Credits

6 Reconciliation in Action: 2014 Tax Year Example

7 What Happens at Tax Time? Anyone who received a premium tax credit will receive a form from the Marketplace (IRS Form 1095-A) which will include information on how much the individual received in premium tax credits for the year.

8 What Happens at Tax Time? Ctd. When a person files federal taxes, he/she will need to fill out IRS Form 8962 to document premium tax credits received and actual amount of premium tax credits owed based on income.

9 What Happens at Tax Time? Ctd. The information a person includes on Form 8962 will be used to indicate whether that person is owed a refund or owes the IRS money because of an advance premium tax credit overpayment. Line 46 on IRS Form 1040 indicates excess premium tax credits a person owes to the IRS Line 69 on IRS Form 1040 indicates net premium tax credit (i.e., amount owed to the taxpayer as refund)

10 Repayment Amounts Are Capped Based on Income Income Single filers All other filers < 200% FPL $300 $600 At least 200% FPL and < 300% PFL $750 $1,500 At least 300% FPL and < 400% FPL $1,250 $2, % FPL and greater N/A N/A Note: Recent IRS guidance waives penalties for late payment and underpayment of owed taxes; the underlying tax liability due to advance premium tax credit overpayments owed to the IRS is not waived

11 Claiming an Exemption from the Individual Mandate

12 Exemptions from the Individual Mandate Most individuals must have minimum essential coverage throughout the year. Individuals who did not have minimum essential coverage, must pay a penalty (for 2014, this penalty is the greater of $95 or 1% of income above the taxing filing threshold; the penalty amount increases every year) Many individuals who did not have coverage may qualify for an exemption from the penalty People will report coverage exemptions on IRS Form 8965 and attach this form to their federal tax return. There are two ways to request an exemption (depending on what type of an exemption it is): An application through the Marketplace; or a person files a federal tax return

13 Common Exemptions Below tax filing threshold ($10,150 for an individual in 2014) Common Exemptions from the Individual Mandate Live in non-medicaid expansion state, but would have been eligible for Medicaid expansion had state expanded Hardship exemption (includes homelessness, natural disaster, and domestic violence) Unaffordable coverage (defined as over 8% of household income) Short coverage gaps (a gap that last less than three months) Indian Tribes Insular areas and territories No need to apply; exemption is automatic Marketplace application OR federal tax return Note: to be found eligible for this exemption, a person does NOT have to receive a Medicaid denial. Marketplace application Marketplace application OR federal tax return Note: if a person is claiming exemption because projected income made coverage unaffordable, he/she must apply for Marketplace exemption; if person claims actual income met the unaffordability test, he/she may apply for exemption on federal tax return. Federal tax return Marketplace application OR federal tax return No need to apply; exemption is automatic

14 ADAP Policies and Best Practices

15 ADAP Policies at Application To be eligible for premium assistance, ADAP/Ryan White insurance purchasing programs require clients to take the full amount of the premium tax credits Example: Virginia ADAP premium assistance eligibility policy

16 ADAP Policies During the Year ADAP/Ryan White insurance purchasing programs are covering clients remaining premium obligations left over after federal premium tax credit Programs are checking in with clients about importance of reporting changes to the Marketplace during the year (including at ADAP 6 month recertification) Income (monthly) Second Lowest Cost Silver Premium (monthly) Individual Minimum Contribution (monthly) Federal Premium Tax Credit (monthly) Mike (150% FPL) Mary (300% FPL) $1, $375 $57.45 $ $2, $375 $ $102.11

17 ADAP Policies at Tax Time? ADAPs are requiring clients who received advance premium tax credits to provide federal tax information to ADAP Line 46 on IRS Form 1040 indicates excess premium tax credits a person owes to the IRS Line 69 on IRS Form 1040 indicates net premium tax credit (i.e., amount owed to the taxpayer as refund)

18 HRSA/HAB ACA Policies on Reconciliation The Ryan White Program is the payer of last resort and grantees must vigorously pursue client eligibility for public and private insurance Grantees may not dis-enroll clients from services for failure to enroll in public or private insurance coverage Ryan White program grantees and sub-grantees must vigorously pursue any excess premium tax credit a client receives from the Internal Revenue Service (IRS) upon submission of the client s tax return NOTE: HRSA is considering allowing Ryan White Program grantees to cover client tax liabilities associated with an overpayment of the premium tax credit

19 Vigorously Pursuing Vigorously Pursuing Best Practices Implement client eligibility screening policy Document client contact Require attestation if client does not enroll in coverage Require client to accept full premium tax credit amount in advance and to acknowledge need to report changes in income to the Marketplace

20 Tax Filing Resources Tax prep resources for low-income individuals: IRS Volunteer Income Tax Assistance (VITA) Program Law school clinics

21 Questions

22 Resources National Alliance of State & Territorial AIDS Directors (NASTAD), Amy Killelea, Xavior Robinson, HIV Health Reform, HIV Medicine Association, HRSA/HAB ACA and Ryan White Resources, IRS The Health Insurance Premium Tax Credit for Tax Year 2014 What You Need to Know, Health Care Reform Resources Center on Budget and Policy Priorities, Beyond the Basics, State Refo(ru)m, Kaiser Family Foundation, Healthcare.gov,