The Affordable Care Act (ACA) and Your Taxes

Attention: There is no longer a federal mandate to have health insurance. The federal mandate for the Affordable Care Act was in place from 2014 to 2018 and the requirement to report your health insurance on your tax return has expired for 2019 and later returns, unless you receive health insurance via the Marketplace. Prepare and eFile Your 2022 Tax Return here on eFile.com and add your health insurance via 1095-A if you purchased healthcare through the Marketplace. If you received a 1095-B or 1095-C, this is generally not required to be included on your taxes unless your state requires this.
Health Insurance
Via Healthcare.gov

Health insurance has seen some changes over the years, including the mandate and changes due to the COVID-19 Pandemic. For 2022 Returns, there is no federal mandate as this part of the ACA has expired.

Marketplace Coverage Changes and Coronavirus

There have been many changes to the Marketplace health coverage due to the Coronavirus and changes to healthcare in general:

  • Lower costs for Marketplace coverage
  • New qualifications to help pay for health coverage
  • Longer enrollment periods
  • Changes reporting the excess advance payments for the Premium Tax Credit (PTC or APTC) on your 2020 Tax Return only (does not apply to 2021 or 2022 Taxes)
  • 2021 and 2022 health plans and prices.

This means that, by the end of 2022 or beginning of 2023, many of the provisions introduced by the American Rescue Plan Act will no longer be in effect. As such, healthcare in 2023 may see some increased in premiums and decreases in the Premium Tax Credit. Go to healthcare.gov to see more information and details about signing up for health insurance via the Marketplace.

You only need to report your health insurance on your return if 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. You may also need to report your health insurance if your state income tax return requires it due to a state mandate.

When you start a free tax return on eFile.com, we will help you 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

You no longer need to report health insurance coverage on your income tax 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. Even if you did not receive advance PTC payments, you should add your health insurance information so you can see if you qualify for this refundable tax credit. 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.

Start Your 2022 Tax Return Now

How to Report Your Health Insurance - You will only need information from your Form 1095-A to report your payments for the Premium Tax Credit plus the premiums you paid each month of the year. During the tax interview, you will be asked about your healthcare and you can then report applicable information. Here are the four main health insurance tax forms broken down:

  • 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 eFileIT 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 holder. 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 when you e-file, but you will use the information from it when you prepare your return on eFile.com and a Form 8962 will be prepared for you. 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 issued by your insurance provider and has the information showing that you, your spouse, and any dependents had 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 only need to enter healthcare information if you were insured through the Marketplace and received Form 1095-A.
  • 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. This form is for your information only and is not included in your tax return. You will only need to enter healthcare information if you were insured through the Marketplace and received Form 1095-A.
  • 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 Form 1095-A, you can go healthcare.gov and print it from there.

If you receive a letter from the IRS about your Marketplace coverage based on their records, they have received a Form 1095-A from the Marketplace for you and the letter might be informing you that you did not file a tax return with this information. The letter is a reminder that if you do not file a return (or if you still need to file the information from your 1095-A), you may not be able to qualify for advance tax payments for your Marketplace coverage next year. Also, if the IRS received a 1095-A form for you, and you did not include the information with your return, when you efile it, it might get rejected by the IRS for this reason. If this happens, log back into your account and add the information from your 1095-A and resubmit your return. Any questions?  Contact us and we can help you.

For more information about the IRS health insurance letter, visit our Premium Tax Credit page. If you already e-filed your return on eFile.com and you still need to report your healthcare information to the IRS, you can enter the information in your account and re-generate your return, then print and mail Form 8962 to the IRS. Be sure you add your 1095-A the first time you file so you can eFileIT to the IRS and not have to worry about mailing anything.

If You Don't Have Health Insurance

For 2019 and later returns, you no longer have to report that you had health insurance all year nor pay a fee if you did not have health insurance on your income tax return. Below is information if you still wish to obtain health insurance via the Marketplace. Here are forms and schedules if you still need to file your previous year returns.

If you don't get health insurance from your employer, you can purchase it via the Marketplace during the open enrollment period (generally, November 1 to December 15 of a given year. For specific 2022 and 2023 dates, refer to the table below.

Important Health Insurance Events
Dates
Open enrollment or change plans begins for 2023 Coverage
November 1, 2022 - December 15, 2022 for coverage that begins January 1, 2023. Open enrollment officially closes on January 15, 2023.
Coverage for 2023 begins if you enrolled by December 15, 2022 and paid your first premium
January 1, 2023
Coverage for 2023 begins if you enrolled by January 15, 2023 and paid your first premium
February 1, 2023
2022 Tax Return Deadline
Report income and household changes to healthcare.gov
All Year 2022 and 2023

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 (job loss, etc.)
  • 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 two 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.

Federal Poverty Level - The federal poverty guidelines are established each year by the U.S. Department of Health and Human Services. The official poverty level for 2022 for residents of most states ranged from $13,590 for individuals to $46,630 for a family of eight, up from $12,880 for an individual to $44,660 for a family of eight in 2021.

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