WASHINGTON — It’s not uncommon to feel some trepidation around tax-filing season. But there’s an added hassle this year for nearly a million consumers who got financial help with health insurance premiums under President Barack Obama’s law.
The government sent consumers erroneous information on forms that they need to complete their 2014 tax returns. Now they’re getting robocalls and emails advising them to delay filing until the mistakes get fixed.
Some are taking it in stride. Others wonder what else could go wrong.
“It’s been a comedy of errors from the start,” said K.C. Crafts, a freelance financial writer from South Berwick, Maine.
The mistake the government made affected 800,000 customers receiving subsidized health coverage through the federal insurance market. Some states running their own insurance exchanges also have had tax-form troubles.
In the federal case, 2015 premiums were substituted for what should have been 2014 numbers on new tax forms called 1095-As. Those forms are like W-2s for people who got subsidized health insurance – building blocks for filing an accurate tax return.
Crafts said her form has another error as well, potentially more serious. The coverage dates are wrong, and the result makes it appear as if she and her husband got much more in subsidies than they actually received. Maine is one of the 37 states served by HealthCare.gov, which is run by the Department of Health and Human Services.
“This is not just an aggravation, it’s a financial issue, because I could end up paying for a clerical error,” she said.
The Obama administration says it’s trying to figure out what caused the broader mistake, even as it rushes corrected information to affected taxpayers.
Asked for an explanation at a recent House hearing, HealthCare.gov CEO Kevin Counihan put it this way: “It appears there was an unfavorable interaction between two pieces of software code.” Translation: The administration is still technologically challenged by health insurance programs.
“This is an unforced error,” scolded Rep. Matt Cartwright, D-Pa. “It provides fodder for those who want to tear down” the law.
Donna Brown of Austin, Texas, said she thinks it’s about on par for the government.
“I never am too surprised when the federal government makes mistakes like this,” said Brown, a former executive administrative assistant for a tech company. Taking a break from the industry’s pressures, she said she’s relieved that she was able to get health insurance as a result of Obama’s law. Brown usually files her taxes at the last minute, so the error notices haven’t affected her routine.
“Whoever implemented this, there would have been problems,” said Brown. “It’s new. Even though it’s the second year of coverage, it’s the first time these statements are coming out.”
The health care law offers subsidized private insurance to people who do not have access to coverage on the job. Because those subsidies are delivered as tax credits, recipients have to account for them each year on their tax returns. That’s what the 1095-A tax form is supposed to help them do.
For John Stephens of Littleton, Colorado, it’s turned to vexation. An audio recording and editing specialist, Stephens said his 1095-A indicates he was only insured for the last two months of 2014, when in fact he had coverage since February. Such a mistake could expose him to tax penalties that the law levies on people who remain uninsured if they can otherwise afford coverage.
Stephens said he’s spent a lot of time on the phone with his insurer and the Colorado health insurance exchange, which is run by that state. “It’s really easy for them to bounce the ball back to the other.” Last year, insurers said many of the enrollment records they got from the then-new insurance markets had errors.
Spokesman Curtis Hubbard said the Colorado exchange is reviewing its records and working with Stephens’ insurer to resolve the situation.
Stephens said he suspects his situation is an early indicator of more problems. “It’s the pointy end of the spear,” he said. “It’s going to be a big, big problem.”
Hubbard said Colorado sent out about 107,000 of the forms to consumers. So far, the exchange has gotten about 170 calls with questions.