ACA: Bolted to Tax Monetizing the Tax Industry’s Obamacare Work

ACA as Tax Bill ACA makes the IRS the scorekeeper  Health care programs use “MAGI” income definitions  Eligibility verified with income tax data Key parts amend Internal Revenue Code  Tax credits expand access to coverage  Tax reconciliation of advance payments of credits  Tax filing requirement for those receiving credits  Tax penalties for individual & employer mandates  Tax reporting of coverage, etc. on tax forms

Form Revenue Reconciliation Customers that receive the §36B tax credits must reconcile their advance payments (based on estimated income) with actual credit for which they are eligible (based on actual income) Proof of Coverage To the extent that the IRS enforces the individual mandate/§5000A penalty, the IRS may request documentary evidence of minimum essential coverage. Details to follow IRS will release additional guidance this summer.

What about ACA Eligibles? Most folks file At least 74% of Americans eligible for help under the ACA file tax returns – including 88% of those qualifying for PTCs. Including Young ‘Uns More than 90% of those under age 35 who are eligible for qualified health plan subsidies are in households that file tax returns. But they need help Among that ACA’s target demographic, most file tax returns with the assistance of tax preparers (e.g., about 65% of EITC recipients file with the aid of tax preparers). Source: Dorn, Stan, Matthew Buettgens, and Jay Dev, “Tax Preparers Could Help Most Uninsured Get Covered,” Urban Institute and Robert Wood Johnson Foundation, February 18, 2014, available at

Breaking Links, not Bread? Transition from SNAP to EITC as key link to health programs: SNAP/Food Stamps eligibility  130% gross; 100% FPL countable  42 states had combined systems for Medicaid enrollment Communing with EITC  Only remaining tangible, material incentive with Medicaid enrollment  Program integrity benefit  Is tax prep a new Mecca of health program information?

JH’s Approach 6 Free help available ◦ No matter where you live or ◦ For which eligibility category you qualify (incl. Medicaid) What’s required? ◦ Just five or six extra minutes to avoid the penalty ◦ You don’t need to touch a keyboard – or buy a stamp! No need to go anywhere else Leave the ACA paperwork to us.