HSA for America

How Will Obamacare
Affect Your
2014 Tax Return?

February 1, 2015
Vol. 11, Issue 2

In 2014, millions of Americans signed up for health insurance and received premium subsidies to reduce their monthly health insurance premium. These tax credits were based upon an individual’s (or family’s) modified adjusted gross income. Now it’s time for the IRS to process 2014 tax returns and reconcile premium subsidies. How will you fare?

Will I Get a Tax Refund?

If you chose not to receive your premium subsidy in the form of an advanced premium tax credit, you will receive your subsidy all at one time in the form of a tax refund, less any taxes you may owe. Keep in mind that if you find out after doing your taxes that you also qualify for cost-sharing, this is not a refundable benefit.

If you applied for health insurance and over-estimated your income for 2014, you likely should have received a higher premium subsidy. In this case, you will receive any excess premium subsidy due in the form of a tax refund, less any taxes you may owe.

Am I Going to Owe the IRS?

There are millions of scenarios that could result in you owing the IRS. Simply put, if you under-estimated your income when applying for a premium subsidy, you will likely owe the IRS. There are a multiple of issues that could result in under-estimating income such as:

  • An increase in earnings
  • Starting a new job at a higher income level
  • A spouse returning to the work force
  • Marriage (adding an income)Higher business earnings

Upon having your taxes completed, your correct premium subsidy will be calculated based upon your 2014 modified adjusted gross income. Any subsidy overpayment will be deducted from any refund you are due or will be due to the IRS as a repayment. Repayments are capped for those making under 400% of the federal poverty level and range from $300 for an individual and up to a maximum of $2,500 for a family.

What Do I Need to File My Tax Return?

If you applied for health insurance and received a premium subsidy, you’ll have to wait until you receive IRS form 1095-A before you can file your taxes. This form will contain information including:

  • Which family members were enrolled in a health plan
  • Monthly premiums you paid to your health plan
  • The amount of advanced premium tax credit you received each month

Once you receive IRS form 1095-A, you can proceed with your tax return. A copy of this form can be found under “messages” on your account (if your state uses the federal exchange).While completing your tax return, you’ll be required to complete IRS form 8962 (Premium Tax Credit). This will determine if you met the requirements to maintain health coverage for a minimum of nine months as required or owe a tax penalty.

How Can I Avoid Paying a Tax Penalty?

The penalty for not having health insurance in 2014 is 1 percent of your household income (over the tax filing threshold) or $95 per adult and $47.50 per child (under 18) - whichever is greater. The maximum penalty per family is $285.

This penalty increases in 2015 and is 2 percent of your household income or $325 per adult and $162.50 per child (under 18) - whichever is greater. The maximum penalty in 2015 is $975 per family.

If you did not have health coverage for a minimum of nine months, you may qualify for an exemption and can file IRS form 8965 (Health Coverage Exemptions). You qualify for a hardship exemption if:

  • You’ve been evicted in the past six months/foreclosure
  • You’re a victim of domestic violence
  • A close family member has passed away
  • You’re homeless
  • You’ve received a shut-off notice from one of your utility companies
  • You’re ineligible for Medicaid because your state didn’t expand its Medicaid program
  • Your health care policy was cancelled and you can’t find an affordable replacement
  • You’ve experienced a fire, flood, or other disaster
  • You filed for bankruptcy in the past six months
  • You have medical expenses you haven’t been able to pay in the past 24 months
  • Results of an appeal qualify for an exemption
  • Another person is required to provide health coverage for one of your dependents
  • You’ve had an unexpected increase in expenses caring for an ill or aging family member

You can learn more about the Affordable Care Act individual mandate and hardship exemptions by visiting our HSA for America web page. Our Advisors are available to assist you with signing up for a health plan in 2015. Open enrollment ends February 15, so be sure to call for an appointment soon at 800-913-0172.

To your health and wealth!

"Wiley III, Christie and Wiley IV"

Wiley Long
President - HSA for America


HSA for America
749 S. Lemay Ave, Suite A3-116
Fort Collins, CO 80524
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