ACA Could Alter 2014 Tax Returns; White House Boosts ACA Outreach
There could be significant tax implications for U.S. residents this year as a result of the Affordable Care Act, the Los Angeles Times reports (Terhune, Los Angeles Times, 1/9).
This year's tax season is the first in which individuals could face financial penalties for not having health coverage under the ACA's individual mandate. Under the individual mandate, most U.S. residents are required to purchase coverage or face penalties for the 2014 tax year of at least $95 for an adult or 1% of an individual's income, whichever is higher.
In addition, this year will be the first that individuals could potentially need to repay IRS if they incorrectly calculated their projected 2014 income and received insurance subsidies that were larger than for which they were eligible. Further, some individuals will receive larger tax refunds if they received too little in subsidies (California Healthline, 1/2).
Experts Estimate Repayments, Refunds
According to the Times, roughly 85% of the about seven million U.S. residents who enrolled in exchange coverage during the initial open enrollment period received federal subsidies to help offset premium costs.
Experts expect that between 40% and 50% of consumers who purchased exchange coverage could have to pay back some of the federal subsidies they received because their actual incomes were higher in 2014 than they had estimated. Such repayments could range from small amounts to thousands of dollars.
John Graves, assistant professor of health policy at Vanderbilt University, said the repayments "could flip people from having a [tax] refund to not." He added, "Nobody can project their income down to the last dollar. It could be a huge deal." According to research he conducted, Graves estimated that the average subsidy was $208 more than it should have been based on household income data.
However, Kathy Pickering, executive director of the H&R Block Tax Institute, noted that the ACA has caps in place to ensure that lower-income individuals do not owe particularly large amounts of money to the IRS because they received too-large subsidies. For example, individuals with incomes below 200% of the federal poverty level will pay back a maximum of $300. The caps increase as a person's income increases, up to $1,250 for people with incomes below 400% poverty level. Further, repayments can be extended into future tax payments, Pickering said.
Meanwhile, others who purchased exchange coverage could receive money from the federal government because their 2014 incomes were lower than expected and they qualified for larger subsidies than they received (Los Angeles Times, 1/9).
ACA Promotions Look To Attract Enrollees
In related news, Vice President Joe Biden's wife, Jill Biden, is working to promote ACA enrollment among women during the ACA's second open enrollment period, The Hill reports.
According to The Hill, Biden and HHS Secretary Sylvia Mathews Burwell during a call with women's groups on Friday pointed to new research that shows the health benefits having coverage can have on women and their families. Biden said during the call that enrolling in "quality, affordable health insurance through the" ACA is "one thing" women "can do right now" to "make a big difference in [their] health."
Last week, HHS officials launched the "Women's Week of Action" campaign, which focused on trying to get women to enroll in health coverage and touted the ACA as "a game changer for women," according to Planned Parenthood.
In addition, the National Women's Law Center and HHS' Office on Women's Health on Thursday worked to answer questions about the ACA on Twitter (Ferris , The Hill, 1/9).
Meanwhile, HHS on Friday released a video featuring Russell Wilson and Richard Sherman, two players on the National Football League's Seattle Seahawks, urging individuals to enroll in coverage through the ACA's exchanges, The Hill reports.
In the video, Sherman touts the importance of having "quality" health coverage, while Wilson directs people to "visit HealthCare.gov and get covered." According to an HHS spokesperson, the administration will use the video to promote ACA enrollment on Facebook and Twitter (Ferris , The Hill, 1/9).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.