Dive Brief:
- About 1.8 million U.S. households that received subsidies for health insurance under the Affordable Care Act have been found to have problems with their tax returns, which could jeopardize their ability to obtain subsidies next year.
- The meshing of health insurance with taxes has proven confusing for many consumers, experts say.
- The 1.8 million households with tax return problems represent 40% of the 4.5 million households that received tax credits.
Dive Insight:
Those who obtained tax credits for health insurance are legally required to account for them on their tax returns, and if they do not, "they will not be able to receive tax credits to help lower the cost of their health insurance for 2016," Lori Lodes, communications director for the Centers for Medicare and Medicaid Services, which runs HealthCare.gov, told the Associated Press.
The households include about 710,000 that have not filed a 2014 tax return; about 360,000 that requested extensions to file their returns; and about 760,000 that omitted the new Form 8962 for accounting of subsidies.
However, the government is aiming to keep these households eligible for subsidies by having the IRS reach out to those in jeopardy.
IRS Commissioner John Koskinen suggests that while there's currently a learning curve, future years will be smoother.
"This is the first year for this new provision," Koskinen noted in a recent letter to lawmakers. "We expect that taxpayers will continue to better understand this process as it becomes more routine."