Yahoo News – by Stephanie Armour
WASHINGTON—The U.S. government estimates as many as six million households may have to pay a penalty for not having had health-insurance coverage last year as required under the Affordable Care Act, officials said Wednesday.
About 150 million taxpayers are expected to file returns during the coming tax season, said Mark Mazur, assistant secretary for tax policy at the Treasury Department. The tax-filing process this year is expected to be trickier because Americans will, in some cases, have to pay a penalty or get smaller refunds because credits they received to offset insurance premiums were too large.
Up to 20% of tax filers—or about 30 million—who weren’t insured for most or any of last year likely will request and receive an exemption from the penalty, officials said. Many exemptions can be applied for during the tax-filing process.
Government agencies are encouraging Americans to file their taxes electronically and are providing filers information via email, phone and text messages. They also are offering support tools on the Internal Revenue Service and other federal websites.
The health law requires almost all Americans to have coverage or pay a penalty, with some exemptions. About 2% to 4% of tax filers are expected to have to pay the fine for not having carried insurance in 2014, which is $95 per adult, or 1% of family income, whichever is greater.
The numbers are based on the percentages of affected filers provided by the Treasury Department. Taxpayers refers to households because, for tax purposes, taxes are paid by a household.
Government officials on Wednesday provided some of their first estimates on how Americans will be affected by the ACA at tax time. About three-quarters of tax filers who had coverage in 2014 simply will have to check a box on their federal tax forms indicating they had coverage last year.
As many as 5% of taxpayers got subsidies that offset the cost of premiums for insurance plans obtained through the ACA. Subsidy amounts were based on consumers’ projections of their 2014 income. Because income can vary and estimates can be inaccurate, some of those who received the credit may owe money or get smaller refunds. Others may get larger refunds if subsidy amounts were too low, officials said.
Federal officials began in early January mailing statements called 1095A forms to consumers with information on how to file returns. The attention to the ACA changes during tax season could prompt Americans to register now for coverage, as the open-enrollment season under the ACA goes through Feb. 15.
Government officials said they haven’t yet made a decision on a special enrollment season that would extend beyond the deadline.
“We hope for millions of Americans this time of year is a reminder to them, for people who don’t have coverage, to get coverage,” said Andy Slavitt, principal deputy administrator at the Centers for Medicare and Medicaid Services, which is overseeing implementation of the health law.
Taxpayers who meet certain requirements and have a balance due on their income tax based on reconciling tax credits will get relief from an IRS penalty for underpayment.
The nonpartisan Congressional Budget Office, which measures the law’s spending and impact of coverage, hasn’t publicly estimated how many people it expected would pay the 2014 penalty, which is the first year the requirement was in effect. In a June 2014 report, the CBO said about four million people would pay a penalty because they are uninsured in 2016.
An estimated $4 billion will be collected from those who are uninsured in 2016, and, on average, about $5 billion would be collected a year during the 2017-2024 period. The penalty consumers must pay increases after 2014.
Those projections differ from an estimate in September 2012. At that time, about six million taxpayers were estimated to pay the penalty for being uninsured in 2016, with about $7 billion collected. The downward revisions were made in part because of projections on the number of people who will be exempt from the penalty.
About 9.5 million people selected or automatically were enrolled in health-insurance coverage through the second month of the continuing open-enrollment season, the federal government said Tuesday. That included 7.1 million consumers who used the federal HealthCare.gov exchange and 2.4 million people who relied on states using their own marketplaces.
The enrollment numbers cover through mid-January and indicate the Obama administration largely is on track to reach its earlier sign-up goals. The administration said in November that it was aiming for up to 9.9 million paid-up enrollees by the end of 2015.
Write to Stephanie Armour at stephanie.armour@wsj.com
http://finance.yahoo.com/news/six-million-households-facing-penalty-210800214.html
they can shove their health care tax up their collective ass.
If you have a tax refund coming, your 2014 fine for not having insurance is automatically deducted. They have access to everyone’s banking info so future abuses are on the horizon.
“Skipping Healthcare”? Sounds like a forethough action.
The headline should indicate the truth in that people “Cannot Afford” the illegal Obamacare!!!
. . .
DUH! Can’t afford to pay the (so-called) ‘health insurance’, how can they afford to pay the penalty.
Stupidity abounds!