A project of the Galen Institute

Issue: "Taxes"

Repayments and Refunds: Estimating the Effects of 2014 Premium Tax Credit Reconciliation

Kaiser Family Foundation
Tue, 2015-03-24
Half of the people who received ACA subsidies in 2014 will owe money to the government because they underestimated their incomes when applying for coverage and got too large a monthly premium credit, according to an analysis released by the Kaiser Family Foundation today. Nearly as many people — 45 percent of individuals with subsidies — overestimated incomes last year and received too small a tax credit every month, Kaiser found. Individuals at the lower-income end of this population will be more likely to owe money (54 percent) than to get any back (40 percent). They also will have lower repayment or refund amounts on average than subsidy-eligible people with higher incomes. Overall, the average repayment will be $794, while the average refund will be $773, Kaiser calculated. These findings spell trouble as many people who received subsidies might not know that they could end up owing back a portion.

Hadley Heath: Policy Focus: King v. Burwell

Independent Women's Forum
Wed, 2015-02-25
On March 4, 2015, the Supreme Court will hear oral arguments in King v. Burwell. The key issue in this case is how the government may provide subsidies to people buying health insurance through government exchanges created by the Affordable Care Act, or ObamaCare. This case could also determine whether millions of Americans are free from the law’s onerous mandates and fines. There are effectively two categories of exchanges: those “Established by a State” (described in Section 1311 of the law’s text) and the federal exchange (described in Section 1321). The statute authorizes the federal government to provide subsidies to enrollees in the state-established exchanges, but not the federal exchange. When it became clear that many states — today as many as 37 — would not establish their own exchanges, the IRS issued a rule in 2012 allowing those who purchase insurance through the federal exchange to also receive subsidies. Plaintiffs in King v.

Jed Graham: ObamaCare's Max Deductible To Hit $6,850 In 2016

Investor's Business Daily
Wed, 2015-02-25
The Department of Health and Human Services is prescribing an extra dose of two of ObamaCare's most bitter medicines for 2016. The maximum deductible will rise to $6,850, up 3.8% from this year's $6,600 ceiling and about 8% above 2014's $6,350 limit. Meanwhile, the penalty for employers that don't offer coverage to most full-timers will rise a like amount to $2,160 per employee, up from this year's $2,080 fine. The original $2,000 fine never applied, because it was bumped up a notch after a year's delay.

Ryan Ellis: Surprise: Poorest Obamacare Enrollees Face $530 Tax Bill

Americans For Tax Reform
Wed, 2015-02-25
The majority (52 percent) of Obamacare enrollees receiving an advance premium tax credit to purchase Obamacare insurance is facing the prospect of paying back $530 of that tax credit to the IRS, according to a new study from H&R Block. This clawback is reducing the refunds for these taxpayers by 17 percent this filing season. Under Obamacare, taxpayers earning between 133 and 400 percent of the federal poverty level are eligible to receive a tax credit to help purchase insurance on Obamacare exchanges. This tax credit is calculated using old tax data of the recipients. The credit is advanced ahead of time to the taxpayer's insurance company. The taxpayer must reconcile at tax time the advance credit received with the actual credit she is eligible for.

Obama administration sent 800,000 HealthCare.gov customers incorrect tax forms

Fox News
Fri, 2015-02-20
The Obama administration revealed Friday that it sent about 800,000 HealthCare.gov customers a tax form containing the wrong information, and asked them to hold off on filing their 2014 taxes. The self-inflicted bungle follows weeks of administration officials touting a successful enrollment season -- one that saw far fewer technical glitches than the rocky launch in late 2013. About 11.4 million people signed up this season. But the errors in tax information mean that nearly 1 million people may have to wait longer to get their tax refunds this year.

Covered California Sends Out Nearly 100,000 Tax Forms Containing Errors, Others Deal With Missing Forms

CBS San Fransisco
Fri, 2015-02-20
DANVILLE (KPIX 5) – Tens of thousands of people who buy their health insurance through Covered California will get an unpleasant surprise when they file taxes this year. Stacy Scoggins gets plenty of mail from Covered California, but the one tax form the agency was required to send her by February 2nd still hasn’t arrived. “After being on hold for 59 minutes, they told me that the 1095-A was never generated,” Scoggins told KPIX 5 ConsumerWatch. She’s talking about the 1095-A form, a document required for enrollees to file their tax returns. It’s a problem, for the recent widow who desperately needs to file now.

Kathy Kristof: Insured Through ObamaCare? Prepare for a Tax Headache

CBS News
Thu, 2015-02-19
If you're among the roughly 20 million people affected by the Affordable Care Act -- either because you bought insurance through health exchanges or will be subject to penalties or exemptions for failing to get coverage -- filing a tax return just got a lot harder. Indeed, potentially millions of people who never before had to file tax returns will now need to file as the result of the health law. The ACA, better known as Obamacare, has put health insurance in reach for millions of Americans by setting up subsidies for those who otherwise couldn't afford to buy coverage. However, the subsidies that may appear to simply lower the cost of insurance premiums are actually "advance premium tax credits" that are paid directly to health insurers.

I have to pay back my Obamacare subsidy

Forbes
Fri, 2015-02-13
Janice Riddle got a nasty surprise when she filled out her tax return this year. The Los Angeles resident had applied for Obamacare in late 2013, when she was unemployed. She qualified for a hefty subsidy of $470 a month, leaving her with a monthly premium of $1 for the cheapest plan available. Riddle landed a job in early 2014 at a life insurance agency, but since her new employer didn't offer health benefits, she kept her Obamacare plan. However, she didn't update her income with the California exchange, which she acknowledges was her mistake.

Doug Badger: Approaching ObamaCare with Humility

The Hill
Fri, 2015-02-13
Approaching ObamaCare With Humility Washington can’t get out of Its own way on health care. Give states a chance. President Obama spoke frequently of humility during last week’s prayer breakfast. Congressional Republicans could use a healthy measure of that virtue should the Supreme Court rule that ObamaCare subsidies are not available in the 37 states with federally-facilitated exchanges. ObamaCare is the product of a yawning humility deficit. Its core conceit is that a group of very smart and ideologically like-minded people could reorganize the financing of a $3 trillion industry that touches the lives of 320 million Americans. Its architects boast that more people have “selected a plan” this time around than during the program’s disastrous initial open season.

If SCOTUS Rules Against ACA Subsidies

Real Clear Policy
Mon, 2015-02-09
By Tom Miller & Grace-Marie Turner Tax subsidies are one of the mechanisms through which the Affordable Care Act expands access to health insurance. These subsidies are available only to those who purchase highly regulated policies through government-run exchanges, and are allocated on a monthly basis to insurance companies to offset the costs of premiums and sometimes out-of-pocket costs. The law's formula for determining the amount of these premium subsidies specifies that people are eligible for them if they are enrolled in qualified plans offered in "an Exchange established by the State under [section] 1311 of the Patient Protection and Affordable Care Act." Only 13 states are operating such exchanges this year. The rest are relying on exchanges created by the federal government. But in 2012, the IRS wrote a rule that allows the subsidies to flow through the federal exchanges as well.

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