This document discusses issues and recommendations related to calculating and reporting the Affordable Care Act tax credit. It notes that a person's tax credit for 2014 was based on their 2012 taxes, but their life circumstances like marital status and income may have changed. It recommends accounting for lower incomes when people are single or going through a divorce. The document also addresses reporting changes in family size, income, and health insurance coverage throughout the year. It provides an example of calculating credits for a separated woman and her children. Overall, the recommendations are to simplify the rules and forms, clearly define reporting responsibilities, and better educate consumers and staff to make the credit process less complicated.

1. Tara Straw
Health Action 2012
January 19, 2012

2.
Do you know what
your tax credit is?

3. Recalculate the credit
Consider:
◦ Your family (& your tax family & your coverage
family)
◦ Income (all sources)
◦ Other sources of coverage
◦ Your benchmark premium
◦ Your advance credit

4.  The credit for 2014 was calculated based on
your 2012 tax return.
 Since then …
◦ Your marital status has changed
◦ Your family has changed
◦ Your job has changed
◦ Your insurance coverage has changed

5.  Taxpayers who marry during the year
◦ Problem: 1+ 1 = 3
◦ Recommendation: Account for lower incomes while
people are single.
 Taxpayers who divorce
 Taxpayers who are separated
◦ Problem: No tax credit if you file separately from
your spouse!
◦ Recommendation: Exceptions for abandoned
spouses, domestic abuse, and other circumstances.

6.  Changes in family composition
 People on your insurance, but not on your
taxes
 People on your taxes, but not on your
insurance
* May not reflect your actual
family.

7.  What to report
 When to report
 Who to report to
Mid-year job loss  Subsidy may be too low
Mid-year job gain Subsidy may be high

8.  More types of coverage = more complications
◦ Did the Exchange get it right?
◦ Did I get it right?
◦ Trapped between Medicaid and the Exchange?
◦ Premium stacking
 Is your employer-sponsored coverage
affordable?

9. Repayment or additional credit (up to
benchmark premium)
Income Maximum
Repayment
(Single/Family)
<200% FPL $300/$600
200%-300% FPL $750/$1,500
300%-400% FPL $1,250/$2,500
>400% FPL No Cap

10. Vanessa is married
… but separated
from her husband.
She has 3 children.
She has wages of
$31k, but sells
cosmetics on the
side, earning an
additional $2,400.
10

11.  Medicaid eligibility
◦ $33,400 for a family of 4 is 143% FPL
◦ Kids look to be Medicaid or CHIP eligible
 Marital status
◦ Is she eligible for credits or excluded by filing
separately from her husband?
 Benchmark
◦ Second-lowest cost silver self-only plan (~$4,300)
 Vanessa’s share of premium is 3.6% ($155/yr)
◦ Vanessa’s credit is $4,142

12.  Change the employer affordability test
 Ease family transitions
 Mandate the use of forms that simplify
consumer decisionmaking and end-of-year
reconciliation
 Prepare for comprehensive training of
enrollment staff and volunteers

13.  Clear rules and uniformity on reporting
◦ Exchange duties:
 Makes advance credit determination*
 Collect names and employer ID of each employer with
one or more employees determined eligible for the tax
credit
 Determination that employer did not provide minimum
essential coverage, plan didn’t meet 60% AV, or plan
was unaffordable

14.  Identify
◦ Who is eligible for credits?
◦ Who will find them?
 Simplify
◦ Don’t require people to remember/calculate/estimate –
Tell them what they need to know!
 Demystify
◦ Customer service
◦ No black box on information
◦ Make sure consumers have tools to make educated
decisions in exchange and ESI
◦ Give consumers tools to understand reconciliation