2016 Tax Information
As tax season approaches, all tax filers must report whether or not they had health insurance coverage on their 2016 tax returns. The Affordable Care Act requires that most individuals have health coverage that meets certain minimum standards and uses the tax system to enforce that requirement. Depending on how you received your health insurance coverage, you will receive certain forms to help assist with your taxes and confirm that you met the requirement by law to have health insurance.
What if I Get My Coverage from Connect for Health Colorado?
If you bought health insurance coverage through Connect for Health Colorado in 2016, you will receive a Form 1095-A (Health Insurance Marketplace Statement). If you need a corrected form by the tax deadline, April 18, please call 855-PLANS-4-YOU (855-752-6749) no later than March 10, 2017 to request a corrected form. All of your Form 1095-As, current and past years, are also available in the “My Documents” section of your online account.
If you are concerned about completing your tax return by the April 18 deadline, you may want to look into obtaining a tax extension by talking with your tax preparer, going to IRS.GOV or reviewing instructions contained in your tax filing software. If you have already filed your taxes, you may wish to look to those same resources for information on how to file an amended return.
Why is Form 1095-A important: The information on Form 1095-A will help you report your health insurance coverage and any financial assistance you may have received last year to the IRS. Be sure to keep the document in a safe spot you can easily access when you file your 2016 taxes. If you received financial assistance, it was either in the form of an Advance Premium Tax Credit, or you may have opted to file for a premium tax credit when you complete your 2016 income tax return.
We provide Form 1095-A to the head of household for each plan in which individual(s) in the household are enrolled. So you may receive multiple Form 1095-As if you:
- Changed plans in the middle of the year.
- Added or removed members from the policy during the year.
- Have members of your household enrolled in different plans.
Having health insurance is the law. The Patient Protection and Affordable Care Act requires individuals to have qualifying health insurance coverage (also called minimum essential coverage) every month of the year. If you purchased coverage through the Marketplace for you and your family, you’ve met the requirement for the months you were enrolled.
You must file a tax return. The IRS requires you file a federal income tax return if you or any other member of your household wants to claim the premium tax credit, or if an Advance Premium Tax Credit was paid in 2016. If you received the tax credit, or would like to claim one, you must file Form 8962 (Premium Tax Credit) with your tax return. See more about Form 8962 below.
If you were enrolled in a catastrophic plan, you are not eligible for a premium tax credit. Furthermore, if you were enrolled in a catastrophic plan, you will not receive a Form 1095-A from Connect for Health Colorado. You might receive a Form 1095-B from your health insurance company reflecting your 2016 catastrophic plan coverage. If you are curious about whether or not you will receive a 1095-B regarding your catastrophic coverage, please contact your health insurance company.
Note: If you did not purchase health insurance in 2016, you may have to pay a penalty.
Changes to your information. If you think information on your Form 1095-A is incorrect, call 855-PLANS-4-YOU (855-752-6749) to find out how to get a corrected form. If the “CORRECTED” box on the top of your Form 1095-A is checked, this means we made a change to the information we originally provided. Make sure you use the corrected form when you complete Form 8962 and file your federal income tax return. If the “VOID” box on the top of your Form 1095-A is checked, this indicates that the previous Form 1095-A for that policy is now void and do not use this form.
How do I report my tax credit?
Choose the scenario that best describes you:
NOT Eligible for a Tax Credit
Based on your income, you were not eligible for a tax credit in the last tax year and paid your full premium price.
This is what you need to do:
If your annual income was less than you estimated, you may find out you are eligible for a tax credit using IRS form 8962. You can claim it when you file. This is one of the many benefits of enrolling through the Marketplace; outside plans are not eligible for tax credits.
You can also refer to this tax preparation flowchart, which walks you through how and when to report your tax credits when filing your taxes.
Using Form 8962
When you fill out Form 8962, it asks you for the “Annual and Monthly Applicable SLCSP Premium” (see Part 2, Fields B11-23). This information can be found on Form 1095-A in Part III, Fields B21-33.
The Second Lowest Cost Silver Plan, or SLCSP, (also known as the “Benchmark Plan”), is the second least expensive plan available to you in your area that was at the Silver coverage level. The IRS uses that information, plus additional information about your family size and income, to determine the amount of premium tax credits for which you and your household were eligible.
We’ll provide the SLCSP for 2016 in Form 1095-A from us. The SLCSP is calculated using your zip code, county and the age of your head of household. Please use the official Form 1095-A when filing your federal income taxes. A sample of Form 8962 and instructions can be found on the IRS website.
If your Form 1095-A includes zeros for the SLCSP premium amount or if you had unreported changes in your family in 2016, such as changing zip codes, please use the tool below to calculate your SLCSP premium amount.Find your second lowest-cost Silver-level plan
Calculating an affordability exemption from the penalty
If the lowest cost Bronze-level Marketplace plan available to you in 2016 cost more than 8.05 percent of your household income, you qualify for a health coverage exemption. This means you wouldn’t have to pay the fee for any months you were uncovered in 2016. IMPORTANT: The only way to know if you qualify for this exemption is to complete your 2016 federal income tax return.Find your lowest cost Bronze-level plan
If you believe any of the above exemptions or circumstances applies to you, you can find the appropriate forms and more information here.
Tax credit reconciliation
Once your federal taxes are filed, the IRS will take the three actions below, called “reconciliation:”
- The IRS will check to see if the income you reported to us is the same as the income reported on your tax return;
- The IRS will also check to see if your tax household size is the same as when you applied for health insurance with us; and
- The IRS will then compare the financial assistance already paid to your health insurance company with the financial assistance that you should qualify for in 2016.
If the household income on your tax return is lower than the income you estimated on your application for financial assistance, you may not have gotten enough financial assistance. At tax time, you may get that extra financial assistance to lower the taxes you owe, or even as a refund.
If the household income on your tax return is higher than the household income you estimated on your application for financial assistance, the IRS may have paid too much financial assistance on your behalf to your health insurance company. In this case, you may have to pay some or all of the premium assistance back when you file.
Cost-sharing reductions, which lowers the amount you have to pay when you visit the doctor, are not considered tax credits by the IRS and are not reported on your Form 1095-A. You are not required to report receiving cost-sharing reductions to the IRS and you will not be required to reconcile this amount.
What if I Have Coverage from Health First Colorado (Colorado’s Medicaid Program), Child Health Plan Plus, Medicare or Other?
If anyone in your household received Medicaid, Child Health Plan Plus (CHP+), Medicare or other government-sponsored health coverage program for any part of the year, you can also expect to receive a Form 1095-B, which you will also need to complete your 2016 taxes. If you have questions about your Form 1095-B, please contact the organization identified as the “Issuer” located on Part III of the form. If anyone in your household received a Form 1095-A from us and if anyone in your household received a 1095-B from Medicaid or CHP+, you may contact Connect for Health Colorado for questions relating to either form.
What if I Have Coverage Through My Employer?
While we can answer some questions about the information on the form, we cannot provide tax advice. We understand this can be complicated and are providing the below resources to you at no cost. The IRS or your tax preparer are also good resources for help.
- Coloradans earning less than $54,000 can find free tax help from Tax Help Colorado and The Piton Foundation. Find help in your neighborhood!
- Free tax assistance is also available for people who generally make $54,000 or less, persons with disabilities, the elderly and limited English speaking taxpayers at a local Volunteer Income Tax Assistance Site (VITA). You can also call 1-800-906-9887.
- Call your local tax preparer or the IRS at 1-800-829-1040. You can also find more information on the IRS website, including their FAQs.
- Think you might be exempt from the requirement to have health insurance coverage for 2016? Use our Affordability Exemption Tool to determine if you are eligible. Note: This tool will be updated with 2016 information soon.
- If you are working with a tax preparer, you may want to share this resource: Tax Preparer’s Guide to the Affordable Care Act
Frequently Asked Questions
A Form 1095-A is a tax form containing information regarding your health insurance status and any financial assistance you may have received. The purpose of this form is to help you fill out Form 8962 when you file your taxes. Form 1095-A contains detailed information such as:
- How many months you had health insurance in a plan sold through the Marketplace
- How much you paid in monthly premiums
- How much financial assistance in the form of an Premium Tax Credit was paid to your health plan on your behalf (if any)
- Who was enrolled in your health plan
All customers who enrolled in a private health insurance plan through Connect for Health Colorado in a plan year will receive a Form 1095-A at the beginning of the next year. If you were exempt from coverage for every month in a plan year, or if you did not purchase health insurance through the Marketplace, you will not receive a Form 1095-A from us.
Everyone who purchased health insurance through Connect for Health Colorado will be mailed a Form 1095-A by the first week of February. An electronic copy of Form 1095-A is available in the “My Documents” section of your Connect for Health Colorado online account. If you need to request a new paper copy for any reason, please call our Service Center at 1-855-PLANS-4-YOU (855-752-6749) to request a new copy. Please be advised that a new copy can take 2-4 weeks, unless additional research is needed. Any copies requested after March 10 are not guaranteed to arrive by April 17, the tax filing deadline for 2016.
Form 8962 is the document you will need to either claim or report your Premium Tax Credits. When you enrolled for insurance through the Marketplace we may have determined if you were eligible for Premium Tax Credits. If you met the requirements, you then chose to have:
If you opted for either some or none of your tax credit to be paid in advance, you get the remainder or total of your tax credit when you file your tax return. Regardless of which scenario above you chose, if you were deemed eligible for Premium Tax Credits you must file a federal tax return, as not filing could make you ineligible for Premium Tax Credits in future years. A sample of this form and instructions can be found on the IRS website.
For the sake of Form 1095-A, financial assistance is a federal tax credit that helps make health insurance more affordable. It is also called a “subsidy,” “Premium Tax Credit,” or “premium assistance.” The amount of premium assistance you qualify for depends on the number of people in your tax household, the taxable income for that household and where you live.
Those eligible for a Premium Tax Credit may have elected to receive it in advance. In this case, the IRS paid the tax credit directly to the health insurance plan to lower the customer’s monthly premium cost. If the customer elected not to receive the tax credit in advance, they will receive it in a lump sum when they file their taxes.
When you file your federal taxes, you or your tax preparer will use the information on Form 1095-A to complete IRS Form 8962. You will use Form 8962 to tell the IRS how much financial assistance was paid to your health plan on your behalf in 2016. The IRS will take the three actions below. These three actions together are called “reconciliation.”
The IRS will check to see if the income you reported to Connect for Health Colorado is the same as the income reported on your tax return.
The IRS will also check to see if your tax household size is the same as when you applied for Connect for Health Colorado.
The IRS will then compare the financial assistance already paid to your health plan with the financial assistance that you qualify for.
If the household income on your tax return is lower than the income you put on your Connect for Health Colorado application, you may not have gotten enough financial assistance. At tax time, you can get the extra financial assistance to lower the taxes you owe. You may even get it back as a tax refund.
If the household income on your tax return is higher than the household income you put on your Connect for Health Colorado application, the IRS may have paid too much financial assistance on your behalf. In this case, you may have to pay some or all of the premium assistance back when you file your taxes.
Limitations on Repayments
|Household Income (FPL%)||Household Income (for an Individual)||Limit on repayment for Filing Single||Limit on repayment for all other filing statuses|
|Less than 200%||Less than $23,539||$300||$600|
|200% – 300% FPL||$23,540 – $35,310||$750||$1500|
|301% – 400% FPL||$35,311 – $47,080||$1275||$2550|
|401% FPL or more||More than $47,081||No limit||No limit|
No. Cost-Sharing Reductions — financial assistance that lowers the amount you have to pay for out-of-pocket costs like deductibles, coinsurance, and co-payments — are not considered tax credits by the IRS and are not reported on your Form 1095-A. You are not required to report receiving Cost-Sharing Reductions to the IRS and you will not be required to reconcile this amount.
If you qualify for financial assistance, you must file an income tax return. You can no longer file any of the short forms, such as the 1040EZ. You have to file one of the longer forms, such as the Form 1040 or Form 1040A. You also must file IRS Form 8962 with your income tax return. Form 1095-A will help you complete Form 8962.
There are four reasons why you may not have received financial assistance:
• You did not qualify because your annual household income was too high. To qualify for financial assistance, your household income must be between 134% and 400% of the Federal Poverty Level (FPL). In some cases, taxable household incomes at or below 100% of the FPL may also qualify for financial assistance. Individuals earning between $16,041 and $48,240 and families of 4 earning between $32,719 and $98,400 may qualify for financial assistance.
• You decided to wait until the end of the year to apply your financial assistance when you file taxes.
• When you applied for health insurance, you did not request financial assistance. Financial assistance helps to lower the monthly cost of health insurance premiums.
If you think there is a mistake on your Form 1095-A, call Connect for Health Colorado right away at 1-855-PLANS-4-YOU (855-752-6749). We may be able to send a corrected Form 1095-A if an error is verified. Please note: If the premium change is less than $5 monthly, a corrected For 1095-A will not be issued. If the “CORRECTED” box on the top of your Form 1095-A is checked, this means we made a change to the information we originally provided. Corrections may take up to four weeks to process. If the “VOID” box on the top of your Form 1095-A is checked, this indicates that the previous Form 1095-A for that policy is now void and do not use this form.
You may also receive multiple Form 1095-As due to corrections. In this case, you should use the most recent form. Corrected forms will have a “Corrected” box checked at the top of the form.
To get help filing taxes, you can consult a tax advisor or get help directly from the IRS website. Help includes “Local Taxpayer Advocates” and “Low Income Taxpayer Clinics.” Free tax assistance is available for people who generally make $54,000 or less, persons with disabilities, the elderly and limited English speaking taxpayers at a local Volunteer Income Tax Assistance Site (VITA). You can also call 1-800-906-9887. Tax Help Colorado and the Piton Foundation also provide free tax assistance at 26 locations across Colorado.
The Monthly Enrollment Premiums in Column A on Form 1095-A may be lower than the premium you pay if your plan includes benefits such as adult dental or vision benefits, which are not required by the Affordable Care Act. For example, if your full premium is $400 and your plan includes adult dental benefits, the premium in Column A might be 99.75 percent of the full premium, or $399 (varies by plan).
If you were enrolled in a catastrophic plan, you are not eligible for a Premium Tax Credit. Furthermore, if you were enrolled in a catastrophic plan, you will not receive a Form 1095-A from Connect for Health Colorado. You might receive a Form 1095-B from your health insurance company reflecting your catastrophic plan coverage. If you are curious about whether or not you will receive a 1095-B regarding your catastrophic coverage, please contact your health insurance company.
Connect for Health Colorado may be able to answer questions about the information on Forms 1095-A and 8962. You can reach us at 1-855-PLANS-4-YOU (855-752-6749). However, Connect for Health Colorado cannot provide tax advice. The IRS is a customer’s best resource for help with Forms 1095-A and 8962. Call the IRS at 1-800-829-1040. Monday – Friday, 7:00 a.m. – 7:00 p.m. or visit www.irs.gov/Affordable-Care-Act.