Tax & Health Care 101: A Toolkit from Vermont Health Connect • Beginning in 2014, Vermonters filing their taxes must report their health insurance coverage at filing time. For most Vermonters, that means answering a few new questions on their tax forms about their health care coverage. • Vermonters with any kind of health insurance likely qualify as having Minimum Essential Coverage (MEC). Vermonters will need to fill in answers on the tax form (8962) at tax filing time. No documentation or payment is needed of these individuals at filing time, but proof of insurance may be required if they are audited. If anyone wonders what qualifies as MEC they can learn more here: http://www.irs.gov/uac/ACA-Individual-Shared-Responsibility- Provision-Minimum-Essential-Coverage • Short coverage gaps of up to three months are allowed in 2014. This means that you can be uninsured for up to a few months and still be considered “covered.” Also, coverage gaps before May 2014 are acceptable, so if you were uninsured in January, February, March, and April and your insurance started in May of 2014, you will also be considered “covered.” Even one day of coverage within a month means that you are considered “covered” for that entire month. If you are not considered “covered,” you may owe fees for non-coverage at tax time. • The State of Vermont mails out proof of coverage to all Vermont Health Connect customers who were enrolled in a Qualified Health Plan (QHP) in 2014. The proof of coverage, a form called 1095-A, will be sent by January 31 of 2015, for use at tax filing time. • The 1095-A tax forms sent by VHC, list out a customer’s Advanced Premium Tax Credits (APTCs) by month. APTCs are tax credits available to VHC customers right away, and many VHC customers in 2014 used them to lower monthly premium costs. Vermonters with an annual income below 400% of the Federal Poverty Level (FPL) and not eligible for Medicaid or other affordable coverage probably received APTCs. • APTCs are tax credits used in advance of tax filing time, to reduce monthly insurance premiums. For people who did not choose to use them in advance, they are simply called Premium Tax Credits, or PTCs. VHC customers who did not use them in advance will receive their credits in full after they file taxes. • The 1095 tax forms will reflect the amount of advanced premium tax credit that the customer used to help pay their monthly health insurance premiums in 2014, based on the customer’s household structure and income that VHC has in its system. If VHC did not have the customer’s appropriate information processed, the monthly APTC amount may not have been properly adjusted. The difference will be reconciled in the tax filing process. For most Vermonters, even if they received much more financial help in the form of more APTCs than they were eligible for, there is a cap on the amount they will need to pay back. • VHC sends 1095-A tax forms to anyone who had coverage on a Blue Cross Blue Shield of Vermont or MVP health insurance plan with Vermont Health Connect (also called a VHC QHP) in 2014. Forms are sent for each QHP plan within each tax household. Therefore, some tax households may get multiple forms, and the APTC amounts will reflect what they need to know for tax filing. • Individuals with Medicaid or Dr. Dynasaur are not eligible for this tax credit because they have another source of coverage and usually do not have to pay premiums. Tax households with some family members on QHPs and other family members on Medicaid or Dr. Dynasaur will receive statements for only those who were on a QHP. • The IRS has updated its websites to help tax filers in meeting the federal government requirements. Also, tax filing websites, programs, and software have are being updated to help everyone fill out the new tax forms about health insurance correctly. • For questions about the Premium Tax Credit amounts on the 1095-A forms, please contact Vermont Health Connect’s Customer Support Center at 855-899-8600 (toll-free). For questions about taxes and filing, please contact a local tax professional. For assistance on finding low or no-cost tax help near you, call 2-1-1. If You Don’t Have Coverage You are not required to have health coverage. However, you could owe a federal tax penalty if you choose to go without it. The penalty will be a dollar amount or percentage of income, whichever is higher. Some examples of how the tax penalties will be calculated are: In 2014, it is $95 per adult, $47.50 per child, or 1% of household income. In 2015, it will be $325 per adult, $162.50 per child, or 2% of household income. In 2016, it will be $695 per adult, $347.50 per child, or 2.5% of household income. You may not have to pay this penalty. Please call the Internal Revenue Service (IRS) at 1-800- 829-1040 for more information about the tax penalty amounts and to discuss your options. • Some Vermonters are eligible for an exemption to the fee. Some exemptions (like in cases of hardship), can be completed at tax filing time. Others must be completed through the Federal Exchange before tax filing. Categories and processes for exemptions are outlined on the Federal Exchange website: https://www.healthcare.gov/fees-exemptions/apply-for- exemption/. Some application for exemptions must go through the Federal Exchange and may take extra time. Successful applications result in an Exemption Certification Number (ECN) to be used during tax filing. .