Tax Form 1095-A Quick Reference Guide

Tax Form 1095-A Quick Reference Guide

Tax Form1095-A Quick Reference Guide This Quick Reference Guide is designed to assist Agents and kynectors to better understand the Form 1095-A information. Table of Contents 1. Tax form 1095-A... 3 2. Working with Form 1095-A... 3 3. Reconciliation of APTC... 5 4. Form 1095-A Scenarios... 6 Page 2 of 7

1. Tax form 1095-A Tax Form1095-A Quick Reference Guide What is tax Form 1095-A? Form 1095-A is known as the Health Insurance Marketplace Statement. It is used by the Health Insurance Exchanges (In Kentucky, it is called kynect ) to report information to the Internal Revenue Service (IRS) on individuals who enroll in a Qualified Health Plan (QHP). Any taxpayer who obtained their health insurance through a federal or State Health Insurance Exchange will receive Form 1095-A in the mail by January 31, 2015. If an individual enrolled in more than one Qualified Health Plan policy, they will receive a Form 1095- A for each policy. What information is included on tax Form 1095-A? Form 1095-A includes total monthly premiums for the recipient and family members, monthly advance premium tax credits, and premiums for the second-lowest-cost silver benchmark plan. Individuals will use the information provided by the 1095-A for establishing compliance with the individual responsibility requirement and for reconciling premium tax credits received with those properly owed. Form 1095-A also contains information for use by individuals in completing IRS Form 8962 (Premium Tax Credit), including to: o Claim the Premium Tax Credit o Reconcile the credit with advance payments of the credit kynect will report information like Premium Paid, Payment Assistance used, and Policy details to the IRS and to individuals who enroll in QHP/HIP through kynect. How does the IRS use the Form 1095-A data? The IRS will use the 1095-A data to reconcile the amount of qualified tax credit against the amount of Advanced Premium Tax Credit (APTC) an individual has used throughout the year. Those who have used less tax credit than they have qualified for will be eligible for an additional credit on their tax return. Those who received more tax credit than they have qualified for may have an additional amount tax liability. 2. Working with Form 1095-A The Affordable Care Act (ACA) requires kynect to report certain information to the IRS and to individuals who enroll, or enroll a family member, in a QHP through kynect. 2.1 1095-A population and triggering considerations Individuals enrolled in QHP will receive the 1095-A notice regardless of APTC. Single tax filer will receive the 1095-A notice for each plan. For example: Married couple file jointly with dependent is enrolled in 2 QHP plans. Thus the primary tax filer will receive 2 1095-A notices. Multiple tax filers enrolled in QHP: Each distinct tax filer will receive the 1095-A notice for each plan. For example: Married couple filing jointly with a 20 year old child who is filing separately. All three are enrolled in the same 2 plans. Given that, the primary tax filer will receive 2 1095-A notices and the 20 year old child will receive 2 1095-A notices. The 1095-A notice will be sent annually before January, 31 st of the following year. 2.2 What information must be reported to the IRS on an annual and a monthly basis? kynect must report the following information annually to the IRS: The name, address, and Social Security number (SSN), or date of birth if a SSN is not available, of a Page 3 of 7

Tax Form1095-A Quick Reference Guide tax filer who is determined eligible for advance payments of the premium tax credit (APTC), and the name and SSN of the individual s spouse; If an application is submitted without a request for an eligibility determination for insurance affordability programs, the name, address, and SSN, or date of birth if a SSN is not available, of an adult (referred to as an other responsible adult in the proposed regulations) who is enrolling, or enrolling one or more family members, in coverage; The name and SSN, or date of birth if a SSN is not available, and dates of coverage for each individual covered under the policy; The monthly premium for the applicable benchmark plan (the second lowest cost silver plan) used to compute APTC. If an application is submitted without a request for an eligibility determination for insurance affordability programs, the Marketplace must either report the premium for the applicable benchmark plan that would apply to the individuals enrolled in a qualified health plan or provide a publicly available means for an individual to find the applicable benchmark plan premium for purposes of determining the individual s premium tax credit at the close of the year; The monthly premium for the plan or plans in which an individual enrolls, without reduction for Payment Assistance, including the amount of premiums for a stand-alone dental plan allocated to pediatric dental benefits; The amount of the Payment Assistance paid on a taxpayer s behalf each month; The name of the qualified health plan issuer and the issuer s employer identification number (EIN); The policy number issued by the QHP; kynect s unique identifier; and Any other information specified by forms or instructions or in published guidance. kynect must provide the following information monthly to the IRS: The information required to be reported annually. Whether the individuals enrolled in the qualified health plan are the taxpayer s dependents; Information on employment (to the extent this information is provided to the Marketplace) consisting of o The name, address, and EIN of the employers of the taxpayer, taxpayer s spouse, and each individual covered by the qualified health plan or plans; and o An indication of whether an employer offered minimum essential coverage, and, if so, the amount of the employee s required contribution for self-only coverage and the Marketplace s determination of whether the employer coverage was affordable and provided minimum value; A unique number (referred to as IRS Group Identifier in technical documentation) that identifies a specific group of individual(s) to enable data association from month to month; The name and SSN, or date of birth if a SSN is not available, of each individual receiving an exemption from the Marketplace from the shared responsibility payment, the months for which the exemption is in effect, and the exemption certificate number; and Any other information specified by forms or instructions or in published guidance. kynect must furnish the following information annually to taxpayers or to other responsible adults: The name and address of the taxpayer or responsible adult; and All of the information reported annually to the IRS for the previous calendar year. As noted above, the SHOP is not required to submit monthly information to the IRS, which will support the implementation of the small business tax credit. This information includes the following: The SHOP s unique identifier; The name, address, and EIN of an employer offering coverage through the SHOP, and the start and Page 4 of 7

Tax Form1095-A Quick Reference Guide end dates of the coverage offered; The name and SSN of employees listed on the employer s roster; and The name and SSN of individuals enrolled in coverage through the SHOP, the plan type purchased, and the start and end dates of the coverage. 3. Reconciliation of APTC This section provides the maximum amount of repayment individuals and families (tax households) will have to pay based upon their percentage of poverty level if they over-received APTC. At the end of the year, the taxpayer s APTC will be reconciled with what the taxpayer should have received (using actual household income and family size for the taxable year). If the APTC was less than the actual premium tax credit, the individual will receive an additional tax credit. Please note: It is possible that an individual could get an additional tax credit from the reconciliation and still not be eligible for a refund. If the APTC was greater than the actual tax credit, the individual will owe the excess as an additional tax liability. Household income as percentage of federal poverty lines* Repayment amount maximum for individuals Repayment amount maximum for families Less than 200% $300 $600 At least 200% but less than 300% At least 300% but less than 400% 400% or more $750 $1,500 $1,250 $2,500 No limit on repayment amounts No limit on repayment amounts *As an example, the 2014 Federal Poverty Levels are: $11,490/year (individual); $15,510 (family of 2); $19,530 (family of 3); $23,350 (family of 4) Page 5 of 7

Tax Form1095-A Quick Reference Guide The table below shows the 2014 Federal Poverty Levels: 4. Form 1095-A Scenarios 4.1 John was a single filer whose taxable income places him at 350% of FPL. Based upon his income reporting at application, he received a total of $2952.00 in APTC for 2014. When his tax credit eligibility is reconciled by the IRS it is determined that his total eligible amount of Premium Tax Credit is $1062.00. The calculation below shows how his total amount of additional tax liability is computed. Total Advance Payments $2,952 Premium Tax Credit -$1,062 Equals $1,890* But capped at $1,250, so total amount due is $1,250. The table below shows advance repayment limitations: 36 B Advance Repayment Limitations Household Income (as % of Single Filers All other Filers Federal Poverty Level) Less than 200% $300 $600 At least 200% - Less than 300% $750 $1,500 At least 300% - Less than 400% $1,250 $2,500 400% or more n/a n/a Page 6 of 7

Tax Form1095-A Quick Reference Guide Other Quick Reference Guides Small Business Health Options Program Health Insurance Eligibility Kentucky Online Gateway Interview Guide Special Enrollment Glossary Topics Covered Employee and Employer Set Up Enrollment and Disenrollment Special Enrollment COBRA HIPs Metal Level Plans Out-of-Pocket Costs Payment Assistance Special Discounts Plan Comparison Tool on the SSP Summary of Benefit and Coverage Eligibility Information and What Individuals Might Need to Bring Eligibility Information for All Programs How to set up a KOG account as an Individual, Employer and kynector How to Fill out an Application on the SSP Commonly Asked Questions Special Enrollment Qualifying Events Special Enrollment Effective Dates Acronyms and Definitions of Terms Page 7 of 7