CARL WATTS & ASSOCIATES

December 08, 2014

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Reporting Health
Insurance for 2014
Research data show that about 8 million previously uninsured Americans gained coverage under the Affordable Care Act during the 2013-2014 open enrollment period, either on Healthcare.gov, also referred to as the Marketplace, or through state exchanges.

Millions more have health insurance coverage through an employer or through Medicare and Medicaid. Still, some remain uninsured. The uninsured must either qualify for an exemption from the mandate or face penalties. Everyone, the insured and uninsured alike, will see changes to their income tax filings.

The ACA requires you and everyone in your family to either have qualifying insurance known as “minimal essential coverage”; qualify for an exemption to the requirement; or make a “shared responsibility” payment (commonly referred to as a penalty) when you file your 2014 tax return.

A question about your health coverage will appear on your Form 1040 for the first time with the 2014 tax year. Unfortunately, until now, the IRS have still to issue the new Form 1040 for year 2014 and the instructions to the form.

The first major change on 2014 tax returns will be the requirement that you report your health insurance status when you file. For most, this will be a simple process, as you will receive the necessary forms in the mail, similarly to how you receive a W-2 from your employer. In July, the IRS issued drafts of these forms, known as the 1095A, 1095B and 1095C.

Form 1095-A: If you purchased health insurance through your state exchange or the federal Marketplace, you will receive this form indicating your coverage.

Form 1095-B: This form will come directly from the health insurance company if you sought private insurance outside of the state exchanges.

Form 1095-C: If your employer furnishes your health insurance, it will provide you with a 1095-C indicating your coverage.

The appropriate 1095 form will come to you, and employers and insurance companies will file other versions (1094 forms) directly with the IRS. These will serve as your proof of coverage and you will put information from them onto your Form 1040.

If you are exempt from the health insurance mandate, you’ll need to provide proof. Qualifying exemptions vary but include: having an approved religious objection to health care coverage; having an income below the threshold that requires you to file a tax return; if you went without coverage for less than three consecutive months in the year; or if coverage is unaffordable, with premiums accounting for more than 8% of your annual income.
Some exemptions must be granted through the Marketplace, while others can be claimed on your tax return.  

If you’ve qualified through the Marketplace, you should have already received a certificate of exemption. For more information on whether you qualify for an exemption and how to exercise it, Healthcare.gov provides more details.




Some people received subsidies in the form of an advanced tax credit to help cover the costs of their premiums. Eligibility for these money-saving subsidies was based on estimated 2014 income when applying for health coverage.

If your 2014 tax return shows your actual earnings were higher than estimated, eliminating your eligibility for subsidies or determining you were simply entitled to less, you could owe money when you file your 2014 tax return.

On the other hand, if you didn’t receive an advanced subsidy and purchased your health insurance through the Marketplace or state exchange, you could be entitled to that tax credit when you file your tax return.

The more probable penalty you could face on your 2014 taxes is the one you are required to pay if you or a family member for whom you are responsible went without insurance coverage without qualifying for an exemption.

This individual shared responsibility payment for 2014 is the greater of 1% of your household income above the filing threshold set by the IRS for your filing status, or a flat amount of $95 per adult and $47.50 per child, capped at $285 per family.

The IRS has not yet released instructions for the new forms, or details on where taxpayers will enter their health care information on the standard 1040 returns. These details, along with further clarifications on how the ACA will affect income taxes for 2014 and beyond, will develop over the next several months.



If you have a question about the information shown on your Form 1095-A for 2014, or about receiving Form 1095-A for 2014, contact your Marketplace.  The IRS will not be able to answer questions about the information on your Form 1095-A or about missing or lost forms.

Each year the Health Insurance Marketplace has an open enrollment period.  The open enrollment period to purchase health care insurance for 2015 runs from Nov. 15, 2014, through Feb. 15, 2015. Contact the Marketplace at HealthCare.gov to enroll.

If you enroll in insurance coverage for 2015 through the Marketplace, you should report changes in your circumstances– like changes to your household income or family size – to the Marketplace when they happen.


Changes in circumstances may affect your advance payments of the premium tax credit. When you report a change in circumstances, you may become eligible for a special enrollment period, which allows you to purchase health care insurance through the Marketplace outside of the open enrollment period.

While you can be certain that we will keep you up-to-date with any new information available, it would be a good idea to consult a tax professional for any dealings with the IRS or any other matter that may have an impact on your taxes.
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