Individuals filing their federal income taxes must be able to prove they (the taxpayers and their dependents) were enrolled in qualifying health care coverage. Therefore, the Internal Revenue Service (IRS) created forms for taxpayers to use when filing their federal income taxes.
The ACA (Affordable Care Act) also requires that Covered California report consumers’ health care coverage information to the IRS to ensure individuals are meeting health care coverage requirements. In addition, Covered California is required to mail an IRS Form 1095-A (view sample) to its enrollees at the beginning of each year that details the amount of the Advanced Premium Tax Credit (APTC) received, if applicable.
There are three types of IRS Forms 1095, as listed below. No federal requirement has been mandated for Medi-Cal programs administrators, health insurance carriers, and employers to provide IRS Forms 1095 to their consumers for the 2014 calendar year.
IRS Form 1095-A (view sample) details Covered California consumers’ 2014 coverage and contains information that is needed to help consumers validate the amount of “Advanced Premium Tax Credits (APTC)” or “financial assistance.” they may have received.
Consumers will use the information listed on the Form 1095-A in order to complete IRS Form 8962 (Premium Tax Credit form). Consumers must complete IRS Form 8962 (view sample) and file it with their federal income tax return if they received APTC for at least one month in 2014 (whether or not they are required to file a tax return).
If consumers or their family members enrolled in more than one health insurance plan through Covered California, they will receive a different Form 1095-A for each health insurance plan, but will only need to complete one IRS Form 8962. For example, if you changed plans during 2014, you will receive two 1095-A forms and use the information on both to complete one IRS Form 8962.
Please contact the Covered California help desk at (800) 300-1506 to report only the following discrepancies on the IRS 1095-A Form:
Consumers should request a 1095-A Dispute Form from the Covered California help desk to report discrepancies on their IRS 1095-A Form for these types of coverage information:
A revised or corrected Form 1095-A will have the “Corrected” box at the top checked to indicate that the IRS Form 1095-A was corrected from the original form. Consumers may need to file an “amended” federal income tax return if:
Reasons why consumers may receive more than one IRS Form 1095-A for one calendar year:
Households with at least one member enrolled in Covered California, and at least one member enrolled in Medi-Cal, are referred to as “Mixed Households”. DHCS will not be sending the IRS Form 1095-B to consumers enrolled in Medi-Cal during the 2014 calendar year. Therefore, Mixed Household consumers will use the IRS Form 1095-A issued by Covered California to report APTC received for the Covered California consumer(s) and provide attestation on their federal tax filing year stating that the Medi-Cal consumer had health coverage for the 2014 calendar.
In an effort to protect the Medi-Cal consumer, Covered California representatives must refer the Medi-Cal consumer to the local county social service offices to make any personal information (name, date of birth, social security number, and address) changes needed to a Mixed Household’s case.
Discrepancies to the health insurance plan premium amounts or APTC amounts for Mixed Households should be reported to Covered California Service Center (800) 300-1506.
IRS Form 8962 (view sample) is the federal tax form that requires individuals to prove that they (the taxpayers and their dependents) were enrolled in health care coverage when filing their federal income tax return.
IRS Form 8962 will be used to calculate the consumer’s eligibility for, and the amount of, Premium Tax Credit (PTC) or “financial assistance” they are eligible to receive to help make their health insurance coverage more affordable. The consumer’s information on the IRS Form 8962 is compared to the amount of APTC or “financial assistance” the consumer may have already received. If they have received too much, they may have to pay back some or all of the tax credits that have been paid for their health care coverage premiums. If they have received too little in APTC, they may be eligible to be paid the extra amount they should have received in the form of a tax refund or PTC.
When a consumer applies for coverage, Covered California estimates the APTC eligibility at that time by using information about their household and their estimated Modified Adjusted Gross Income (MAGI) provided on their application. IRS Form 8962 will help them determine if they have received too much or too little in APTC, based on what they truly earned and are reporting on their tax return.
For those consumer households that did not receive APTC, the IRS Form 8962 will help them see if they should have received tax credits, based on their information when they file their federal income tax return. If they are eligible for tax credits based on the information in IRS Form 8962, they may be eligible to receive the amount of tax credits they should have received throughout the year in the form of a tax refund (PTC).
Consumers filing their federal income taxes will need to use their IRS Form 1095-A to prepare the IRS Form 8962.
If the household income on your tax return is higher than the household income you put on your Covered California application, then you may have had too much premium assistance paid in advance on your behalf. In this case, you may have to pay some or all of the premium assistance when you file your taxes.
The ACA has caps in place to protect lower-income people from owing a significant amount. The caps are also follows:
| Household Income Percentage of Federal Poverty Line | Limitation Amount for Single | Limitation Amount for all other filing statuses |
|---|---|---|
| Less than 200% | $375 | $750 |
| At least 200%, but less than 300% | $950 | $1,900 |
| At least 300%, but less than 400% | $1,575 | $3,150 |
| 400% or more | No limit | No limit |
Please view the federal poverty line Income Guidelines Chart to determine if the cap applies to your level of income. There is no cap for individuals making more than 400% of the federal poverty line. However, repayments can also be extended into future tax years.
If the household income on your tax return is lower than the income you put on your Covered California application, you may not have received enough premium assistance. At tax time, you may get the extra premium assistance in the form of a tax credit to lower the taxes you owe. You may even get it back as a tax refund.