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Tax Season and Health Care: What You Need to Know

By Jesse Ellis O'Brien
Policy Director

Tax season is here, and many Oregonians may have questions about new tax forms and provisions, including health premium tax credits and the new requirement to purchase health insurance. Here’s what you need to know.

1. If you have health insurance through your employer, Medicare or the Oregon Health Plan

Generally, all you will have to do is let the IRS know that you had health coverage for 2014 by checking a box on your tax return. If you have questions about whether your coverage meets IRS requirements, check irs.gov/Affordable-Care-Act/Individuals-and-Families  for info, or use their interactive tool.

2. If you purchased coverage through Cover Oregon

Last year, tens of thousands of Oregonians received a tax credit to lower the cost of their monthly premium by purchasing health coverage through Cover Oregon. If you or someone in your family took advantage of these tax credits, you will need to answer a few questions about your health insurance when you file your taxes. You’ll receive a new statement that includes all the information you need about your coverage to file your return.

Look for your health insurance statement—called a 1095-A—in the mail and check to make sure the information is correct.

  • You will receive a 1095-A statement from Cover Oregon; these forms were sent out last week. You will use this like a W-2 to complete your return. The 1095-A will include things like the months you had coverage, the amount of the tax credit you received each month, and the amount of the premium you paid.
  • Check the information on your 1095-A form to make sure everything is correct. If you see a difference in things like the dates you had health coverage or who in your household is covered by your plan, visit coveroregon.com/tax-information/ or call 1-(855)-268-3767 to get a corrected form.
  • If you already filed your taxes before you received your 1095-A, you may need to file an amended return to prove your health coverage for 2014.

You must file a tax return with a 1040A or 1040 form. You cannot use a 1040EZ if you purchased health insurance through Cover Oregon.

If you got a tax credit for health insurance, you must fill out a new form called Form 8962. You can also fill out this form if you want to apply for a tax credit now.

  • Form 8962 will help you calculate the final amount of your tax credit and is submitted as an attachment to your 1040 form. You can download Form 8962 at IRS.gov.
  • When you signed up for health insurance, you had to estimate your income for 2014. Estimated income determined the size of your tax credit. If you had any changes in things like your income or household size throughout the year, it could impact the final amount of your tax credit. You may get a refund if you overestimated your income. You may owe money back if you underestimated your income.

For more information about your 2014 coverage, visit coveroregon.com or call 1-(855)-268-3767. As you have likely heard, due to Cover Oregon’s technical difficulties, Oregon is now using healthcare.gov for health insurance enrollment. If you received coverage and tax credits through Cover Oregon and wish to continue that coverage for 2015, you must re-enroll through healthcare.gov by the enrollment deadline, February 15.

If you have questions about your taxes, need to download forms, or want to learn more about the fee for not having health insurance, visit IRS.gov. Many people who signed up for health insurance through Cover Oregon can get free tax assistance. For more information, visit IRS.gov/freefile  or IRS.gov/VITA .

3. If you are uninsured

If you do not have health coverage, you may be eligible for an exemption from IRS requirements. You may be exempt if coverage would be unaffordable for you, if you have experienced significant hardship in the past year, or for a variety of other reasons. You can use the IRS’s interactive tool to see if you may be eligible for an exemption.

If you are not exempt, you will have to pay a fee of either $95 or 1% of your income for 2014, whichever is higher. This fee will be included in your tax bill for the year. We have heard that some unscrupulous tax preparers are trying to charge this fee to their customers out-of-pocket—don’t be fooled, this fee is part of your tax bill and should not go to your tax preparer.

4. What about next year?

If you are uninsured and concerned about the fee, it’s not too late to sign up for coverage for 2015 – you have until February 15. Go to the health insurance marketplace at healthcare.gov to check your eligibility for tax credits to help pay for coverage, and for the Oregon Health Plan. All plans on healthcare.gov have comprehensive coverage, and no-one can be turned away for a pre-existing condition.

If you miss the February 15 deadline, you can still sign up right away if you’ve recently lost other health coverage, or in other special circumstances, such as getting married or having a baby. Use this online screener to determine if you qualify for a special enrollment period.

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