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Past-due premiums, missing tax forms may hamstring marketplace customers

Michelle Andrews, Kaiser Health News on

Published in Health & Fitness

"Make sure you go to the marketplace and terminate your plan," said Straw. "Otherwise you could be on the hook for these payments during open enrollment or during a special enrollment period if you try to sign up again."

UNFILED TAX DOCUMENTS

Most people who get marketplace coverage qualify for tax credits that provide money to help pay for their premiums. Those are available to consumers whose income is less than 400 percent of the federal poverty level (about $48,000 for one person). If you had a marketplace plan in 2016, you were supposed to include a special document -- IRS Form 8962 -- when you filed your 2016 federal income taxes this year. This document reconciled how much you received in advance premium tax credits against how much you should have received based on your actual income for the year.

If you didn't file the form with your taxes, "you'll be able to sign up for coverage, but you won't be able to get subsidies," said Karen Pollitz, a senior fellow at the Kaiser Family Foundation. (Kaiser Health News is an editorially independent program of the foundation.)

To fix the problem, you'll generally have to file the Form 8962, along with the second page of your income tax Form 1040 and the 1095-A form you received from the marketplace showing your 2016 enrollment details, said Straw. If you want to receive premium tax credits starting in January, you'll need to get that done before the open-enrollment period ends Dec. 15.

This issue will primarily affect people who are automatically re-enrolled in a plan for the following year, as were 31 percent of marketplace customers last year. If you sign into your marketplace account to update your income and other personal information -- as everyone should do for so many reasons -- you'll be asked whether you've filed and reconciled your taxes. That is a signal the issue needs to be addressed.

Some policy experts are concerned that this filing requirement will be particularly challenging for people whose annual income is below the usual threshold required to file an income tax return (about $10,000 for one person or $20,000 for a married couple) but who must do so now because they receive advance premium tax credits.

"It's confusing enough, and many people don't remember that they now have to file an income tax form," said Mara Youdelman, managing attorney at the National Health Law Program, which has been working to ensure people receive proper notification that their benefit may be at risk if they don't comply with filing requirements.

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