California Obamacare Exchange Sent Faulty Tax Forms To 100,000
The California Obamacare exchange sent incorrect tax forms to 100,000 different households that accepted federal premium subsidies for health insurance during the health care law’s first year.
Covered California, the state exchange with the largest number of customers in the country, said Friday that some of its tax forms were incorrect because the exchange’s customer information didn’t match data from health insurers, the Los Angeles Times reports.
Obamacare customers who take taxpayer subsidies to cut down the price of health coverage must later fill out Form 1095-A, which documents how much money they received in subsidies in all of 2014. But the total amount of subsidies were incorrect for a large chunk of the exchange’s customers due to the disconnect between the exchange and health insurers. In some cases, the length of time a customer was insured was incorrect, changing the total amount of taxpayer assistance received.
The error affects 100,000 households in the state, out of 800,000 households that Covered California sent the forms to in total.
The exchange said it is getting updated information from health insurers and will send revised forms to customers by the end of February, in addition to emailing customers when the updated forms are available online, according to the L.A. Times.
Just ahead of tax season, the blunder puts an extra burden on 100,000 households with Obamacare customers in California, who were already facing what experts warn will be the most complicated tax season ever. (RELATED: Obamacare ‘Clawback’ To Hit Some Subsidy Recipients With Huge Tax Bill)
The 1095-A forms in question are new this year, the government’s answer to the complications Obamacare introduces into filing taxes. Each health-care exchange will issue the forms to customers who received subsidies in the form of tax subsidies. The federal government will issue about 4 million of the new 1095-A forms to Obamacare customers using the federal website this year, HealthCare.gov CEO Kevin Counihan estimated last month.
Obamacare customers are required to estimate their yearly income when applying for health insurance on the law’s exchanges to determine the amount of premium subsidy available. Those whose income was higher than anticipated will end up owing the IRS when they submit their tax return in April.
As many as four in ten Obamacare customers that received subsidies could end up owing the federal government money in April.