888-765-5400Federal Subsidies and Taxes – How They Are Connected
Perhaps you are among the many Americans who received a federal subsidy to help reduce the cost of your Blue Cross Blue Shield of North Carolina health insurance in 2014. If so, there are some things you may need to know. Although as insurance agents we don’t have all the answers, we can offer some helpful information as you enter into tax season. For more specific details about how your subsidy will affect your personal taxes for 2014, we recommend speaking with your tax adviser or the federal Marketplace.
What we can tell those of you who received a federal subsidy for health insurance is that the Obama administration stated earlier this month that it will begin sending out tax reporting forms that you will need in order to fill out your 2014 tax return. These forms are specifically for individuals who got tax credits under the Affordable Care Act. This form is important, so make sure you are looking for it in the mail and take it with you when you file taxes. The form is called 1095-A and according to the administration, the form comes filled out with all the pertinent information from the federal healthcare Marketplace. The form lists the members of each household that received a subsidy and how much the government paid each month toward the health insurance premium.
Secretary Sylvia M. Burwell said in a statement, “In the coming weeks, HHS will work with other agencies, tax preparers and community organizations to arm… consumers with the information they need to know as they prepare to file their taxes.”
As most people getting a federal subsidy already know, the amount of tax credit you receive is based on a formula that takes into account your income and the number of people you claim on your tax form. According to the IRS, those individuals who received too much of a subsidy will see a reduction in their tax refund and those who received less of a subsidy than they were entitled to will receive a refund.
Some important things to keep in mind:
- If you normally file Form 1040EZ, you can no longer do that if you received subsidized health care. You will have to file a longer form
- If you were only in the healthcare Marketplace exchange for a few month, vice the whole year, you will still need your 1095-A to account for any subsidy you received.
- You could get more than one 1095-A, which could happen for various reasons. You will need to keep all of them for filing taxes.
- Contact the healthcare Marketplace if you think there is a mistake on your 1095-A.
If you did not receive a subsidy for 2014, but are interested in seeing whether or not you may qualify for a premium tax credit toward your BCBSNC health plan for 2015, you may generate a quote and enter income information to help estimate your potential subsidy.
For more information on Blue Cross Blue Shield of North Carolina health insurance coverage, the Marketplace and healthcare gov to apply for your subsidy, please visit our website at www.nchealthplans.com or call our toll free number 888-765-5400 and speak with one of our experienced and professional agents. Let us help you navigate through the Health Care Reform changes in accordance with the new regulations of The Affordable Care Act, also known as Obama care.