Covered California Sends Out Thousands of Corrected Tax Forms

Tens of thousands of Californians have received updated tax forms from the state's health insurance exchange, the Los Angeles Times reports.

Background

The 1095-A form documents how much consumers received in health insurance subsidies from the federal government last year (Terhune, Los Angeles Times, 3/23).

In February, the Obama administration said about 20% of U.S. residents who enrolled in coverage for 2014 through the federal exchange received 1095-A forms that included the wrong value for the local premium, which influenced other tax calculations. According to an HHS official, "Because of an intermittent defect in the code that was used to create these forms, the premiums listed were for 2015" instead of 2014. As a result of the error, taxpayers might claim a subsidy that is either higher or lower than that for which they are eligible (California Healthline, 2/25).

A similar mistake occurred in forms sent out by state-run exchanges, according to the Times.

On Friday, the U.S. Department of the Treasury said consumers who received incorrect information from a state insurance exchange and already filed their taxes will not be required to submit corrected tax return paperwork.

Details of Correct Forms

Covered California Executive Director Peter Lee called the federal government's decision to give consumers more flexibility "a very big deal." However, he noted that consumers can refile their taxes if the updated forms indicate they qualify for a larger return.

Covered California has mailed out about 120,000 corrected tax forms.

Meanwhile, tens of thousands of residents still are awaiting corrected tax forms. Lee said those consumers likely will receive updated forms by the end of the month.

However, he said the exchange still is sorting through some forms and some consumers might not receive updated forms until after the April 15 deadline to file taxes. He said, "This is the first tax season ever that health care and taxes are interwoven. We are learning from this" (Los Angeles Times, 3/23).