ACA Tax Reporting: Lessons From 5 Successful Marketplaces

By: Elizabeth Osius | Jocelyn A. Guyer | Joel S. Ario
– Tax Notes

In tax year 2014, health insurance marketplaces faced the new requirement of reporting information about qualified health plan enrollment to enrollees through Form 1095-A. While there was significant concern that the marketplaces would fail to meet this new obligation, the 14 states and the District of Columbia with state-based marketplaces (SBMs) and the federally facilitated marketplace (FFM) generally executed their reporting requirements successfully, providing most forms in a timely manner and working effectively to tackle and resolve challenges. The IRS also worked to ensure that this first tax season went smoothly by providing consumers flexibility in filing their tax returns, permitting them to not refile with late corrected forms, and encouraging them to request filing extensions if needed. Over time, as people become more accustomed to the Affordable Care Act tax provisions, the IRS is likely to provide less flexibility and have higher expectations of consumers and marketplaces. In total, the IRS estimates that the FFM and SBMs distributed 4.8 million Forms 1095-A, covering some 7.5 million individuals.

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