Avoid Tax Surprises: Report Life Changes to the Marketplace

Article Highlights:

• Reasons for reporting life changes to the insurance marketplace 
• Changes that should be reported 
• How to report changes 
• Applying for 2015 coverage 

If you are enrolled in insurance coverage through a government Health Insurance Marketplace, it is important that you report certain changes to the marketplace when they happen, such as changes to your household income or family size and other issues that affect your eligibility for and the amount of the advance premium tax credit (APTC). The APTC is used to reduce the amount you must pay for your monthly health insurance premiums.

Timely reporting can also help to eliminate complications on your tax return so the marketplace can properly report your coverage premiums and APTC when there has been a change in family circumstances such as a divorce or legal separation. The marketplace will report the premium cost and APTC on Form 1095-A (to be issued in January 2015) so the APTC can be reconciled to the premium tax credit you are entitled to on your tax return. Keeping the marketplace informed of changes throughout the year can help avoid unpleasant surprises when your tax return is prepared.

Changes in circumstances that you should report to the marketplace include:

• Getting married or divorced 
• Having a child, adopting a child, or placing a child for adoption 
• Changes in income 
• Getting health coverage through a job or a program like Medicare or Medicaid 
• Changing your place of residence 
• Having a change in disability status 
• Gaining or losing a dependent 
• Becoming pregnant 
• Experiencing other changes that may affect your income and household size 
• Other changes to report include change in tax filing status; change of citizenship or immigration status; incarceration or release from incarceration; change in status as an American Indian/Alaska Native or tribal status; and correction to name, date of birth, or Social Security number. 

There is still time left this year to report changes. Reporting changes will help you avoid getting too much or too little advance payment of the premium tax credit. Getting too much means you may owe additional money or get a smaller refund when you file your taxes. Getting too little could mean missing premium assistance to reduce your monthly premiums. Therefore, it is important that you report changes in circumstances that may have occurred since you signed up for your plan.

Reporting Changes - To report changes to your 2014 coverage, which ends December 31, 2014, log into your account on the marketplace website, select your existing 2014 application, and choose "Report a life change" from the menu. For additional assistance, check the website for your marketplace.

Applying for 2015 Coverage - After November 15, when you log into your account, you'll see a 2015 application pre-filled with some information from 2014. If you make updates to the information, you'll get your new eligibility results for 2015 coverage. You can then pick a plan and enroll. 

If you have questions about the premium tax credit or reconciling the credit's advance payments, please give this office a call.

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