The Affordable Care Act (ACA) and Your Taxes

The Federal mandate to have Health Insurance has ended with Tax Year 2019.

Are You
Insured?

The Affordable Care Act (ACA) and how it affects your tax return changes significantly for your 2019 return. The most important change is that the individual mandate has gone away on your 2019 return. This means that you will no longer pay a penalty if you did not have health insurance in 2019. You are no longer required to report your health insurance on your return UNLESS you or a family member were enrolled in health insurance through the Marketplace and advance payments of the Premium Tax Credit were made to your insurance company to reduce your monthly premium payment. When you start a free tax return on eFile.com, we will automatically report the required information regarding your health insurance and the Premium Tax Credit on the correct tax forms. If you need to report health insurance information because of the Premium Tax Credit or if you need general information about obtaining health insurance via the Marketplace, see below.

Reporting Your Health Insurance for the Premium Tax Credit

Due to recent changes in the ACA, you no longer need to report general health insurance coverage for the tax year unless you or a family member were enrolled in health insurance through the Marketplace and advance payments of the Premium Tax Credit were made to your insurance company to reduce your monthly premium payment. When you prepare your tax return on eFile.com and indicate that you need to report your advance payments to compare with your Premium Tax Credit for the year, we will prepare the proper tax forms to report this on your tax return, so you don't have to! 

Start Your 2019 Tax Return Now!

How To Report Your Health Insurance - You will need to use one or more of the forms below to report your payments for the Premium Tax Credit on your tax return on eFile.com. During the tax interview questions about Health Care you will be asked about these payments. You can use these forms for the information you will be asked to provide:

  • Form 1095-A - Health Insurance Marketplace Statement - You will receive this form if you purchased health insurance via the Health Insurance Marketplace exchange. It will provide information for you if you need to include Form 8962 for the Premium Tax Credit. If you or your family members enrolled in more than one health plan via the Marketplace, you will receive a Form 1095-A for each policy. A copy of each Form 1095-A will also be sent to the IRS. You will not need to include the Form 1095-A with your return however you will use the information from it when you prepare your return on eFile.com and a Form 8962 will be prepared for you to file with your return. Form 8962 is needed with your return to claim the credit and reconcile your advance credit payments.
  • Form 1095-B - Health Coverage - This form is provided by your insurance provider and has the information you need to report on your tax return showing that you, your spouse, and any dependents have qualifying health insurance coverage for some or the entire year. This form is for your information only and is not included in your tax return. You will use the information when you prepare your return on eFile.com.
  • Form 1095-C - Employer-Provided Health Insurance Offer and Coverage - This form will be provided to you by your employer and contains information about the health coverage offered to you by your employer. The information from your 1095-C is relevant if you purchased health insurance through the Marketplace and wish to claim the Premium Tax Credit. You do not need to wait for this form to file your return, you can rely on other information from your employer. If you do not wish to claim the Premium Tax Credit, you do not need to use this form. This form is for your information only and is not included in your tax return. You will use the information when you prepare your return on eFile.com.
  • Form 8962 - Premium Tax Credit - This form will be prepared for you on eFile.com if you purchased health insurance through the Marketplace and you are eligible for the Premium Tax Credit and you wish to claim it.

If you did not receive Forms 1095-A or 1095-C, you can go Healthcare.gov and print them from there.

If you receive a letter from the IRS about your 2019 Marketplace coverage then based on their records, they have received a Form 1095-A from the Marketplace for you, and the letter is informing you that you did not file a 2019 tax return. The letter is a reminder that if you do not file a return, you may not be able to qualify for advance tax payments for your Marketplace coverage in 2020. For more information about the IRS health insurance letter, visit our Premium Tax Credit page.

If You Don't Have Health Insurance

You will no longer have to report that you had health insurance all year and pay a fee if you did not have health insurance on your 2019 return. However, below is information if you still wish to obtain health insurance via the Marketplace.

If you don't get health insurance from your employer you can purchase it via the Marketplace during the Open Enrollment period (Nov. 1 to Dec. 15, 2019). If you miss the Open Enrollment period you might be eligible for the Special Enrollment Period that lets you buy coverage via the MarketAffordable Care Act - How does it affect taxes?place on HealthCare.gov outside the Open Enrollment period. You might get coverage during the Special Enrollment Period if any of these situations applies to you:

1) Life Changes for Special Enrollment Period:

  • Loss of health coverage
  • Changes in household size such as getting married, birth or adoption of a child, divorce, legal separation, death
  • Moving to a new residence
  • Gaining citizenship or lawful presence in the U.S.
  • Released from incarceration (detention, jail, prison)
  • No longer eligible for Medicaid or CHIP
  • Being a member of a federally recognized tribe or as an Alaska Native Claims Settlement Act (ANCSA) Corporation shareholder
  • AmeriCorps starting or ending service

2) Medicaid and CHIP:

  • You can enroll in coverage through Medicaid and the Children's Health Insurance Program (CHIP) if you qualify. There is no limited enrollment period for these programs which provide free or low-cost health coverage to millions of Americans and you can apply any time.

If you do not qualify for the 2 circumstances described above, your employer may be required to offer you health insurance, so you should check with them as well. If your employer employs 50 or more people, they are required to offer you health coverage. If you can get coverage through your employer, you can still opt to get your insurance privately or through the Marketplace at HealthCare.gov (during the Open Enrollment period), but you will not qualify for a health insurance premium called a subsidy.

3) If You Cannot Afford Health Insurance:

If your household income is between 100% and 400% of the federal poverty guidelines, and you do not qualify for Medicare, Medicaid, or employer-sponsored health coverage, then you may qualify for a subsidy to pay some or all of the cost of health insurance purchased through an exchange.

Subsidy - A health insurance premium subsidy is actually a federal tax credit, which the IRS calls the Premium Tax Credit. However, the credit is applied directly to the price of your premium and acts like a discount. The amount of your subsidy depends on your family size and income. The lower your income (and the larger your family), the higher your subsidy.

For individuals and families with incomes from 100% to 400% of the federal poverty level, the out-of-pocket cost for health coverage will be from around 2% to 9.5% of the actual price (based on a plan that covers 70% of healthcare costs). Additional funds, called cost-sharing assistance, will be made available to households with incomes lower than 250% of the poverty level.

Households with incomes less than 100% of the federal poverty level will generally qualify for Medicaid. More people, including single individuals, may qualify for Medicare, if their resident states are participating in the Medicaid expansion offered by the Affordable Care Act.

Federal Poverty Level - The federal poverty guidelines are established each year by the U.S. Department of Health and Human Services. For 2019, the official poverty level for residents of most states ranged from $12,490 for an individual to $43,430 for a family of 8.

Important Health Insurance Events
Dates
Open Enrollment Begins for 2020 Coverage
November 1, 2019
Open Enrollment Ends for 2020 Coverage
December 15, 2019
Coverage for 2020 Begins
January 1, 2020
2019 Tax Return Deadline
April 15, 2020
Report Income and Household Changes to Marketplace
All Year 2019 and 2020

Related Health Care Tax Information

Premium Tax Credit

What Medical Expenses Can I Deduct on My Tax Return?

Health Savings Accounts and Taxes