Tax season is upon us and if you are one of millions of Americans who bought health insurance through a government exchange, filing your taxes could be slightly more complicated, so let us take you through the basics of the Affordable Care Act and taxes.


If you didn’t have coverage in 2017 and don’t qualify for an exemption, you will have to pay a penalty that’s based on your income and the number of months you went without health coverage. If you didn’t have coverage at all in 2017, you’ll have to pay the higher of either $695 per adult and $347.50 per child (limited to a family maximum of $2,085) or 2.5% of your income. If you don’t pay the fee the IRS can take it out of any future tax refunds.

When it comes to the Affordable Care Act and taxes, you can avoid tax penalties simply by having coverage, as long as it qualifies as minimum essential coverage. That includes any Marketplace plan, individual insurance plan, employer plans (including COBRA), retiree health plans, Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), TRICARE, veterans healthcare plans, Peace Corps volunteer plans and qualifying self-funded health coverage offered to students by universities.

Checking the box

Most tax filers will simply check a box on their tax return to show they had health coverage for the entire year. But if you purchased coverage through a government marketplace or didn’t enroll in health insurance at all, there are a few extra steps.

If you bought health insurance through a state or federal insurance exchange you should receive IRS Form 1095-A, the Health Insurance Marketplace Statement, by mid-February. It lists which members of your household were covered, for how long, the premium costs and any advance payment received as a premium tax credit (also known as a subsidy). Make sure the information on the form is accurate and if you find errors, call the Marketplace Call Center at 1-800-318-2596 to find out how to get a corrected form.

You will need the information on the 1095-A to input complete your tax turn. Most of the millions of people who bought insurance through the exchanges received subsidies, which reduced their monthly premium. But those subsidies were based on the previous year’s income, so if your income changed, you will have to pay back some of that money, while others could wind up with bigger refunds.

Paying back subsidies

If you discover you received too much in subsidies, you will have to pay that money back; however, there are limits on that payback amount for some families, depending on the size of the household and the income. But if you received subsidies and your income is at least 400% of the federal poverty line, you’ll have to pay back everything you received.

While we can’t include all the details you may need to know about the Affordable Care Act and taxes for filing this year, hopefully the information above has provided you with a better understanding of how the process works.

HealthMarkets’ licensed insurance agents can help you understand what you need to know about the Affordable Care Act and assist you in obtaining the health coverage necessary to meet the requirements of the Affordable Care Act. Call us 24/7 at (800) 304-3414 or meet with one of our 3,000 local, licensed health insurance agents.

HealthMarkets’ agents cannot provide tax or legal advice. Contact your tax or legal professional to discuss details regarding your individual circumstances.


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