Tax Error Impacts Many Americans, Including Those without Obamacare
Humera Gul, Live Wire Intern
In the United States around 800,000 taxpayers, according to HealthCare.gov, received incorrect tax information from the government who registered for the insurance policies. They were urged on February 20, 2015 to stop filing tax returns until the error could be corrected. The corrected forms are set to arrive in early March. For some, this may be good news, but it may also mean more taxes.
The affordable care act offers advance premium tax credits to individuals that qualify. However, many individuals were not aware they would be repaying a sizable portion back in their federal tax returns.
The Obama administration is under the pressure of congressional Democrats. Officials said, “They did not know why the error had occurred.” They also announced that they would give more time to several million people to buy health insurance so that they could abide by federal law and avoid more tax penalties.
If a person didn’t have health insurance then the fine would be $95 or one percent of their income, whichever is the greater amount. The penalties are due to increase even more next year. The White House has offered a chance for people to buy health insurance, even though the enrollment period is over. This will enable people that are paying fines this year to get health insurance and avoid the fines next year.
“Taxpayers seeing the financial consequences of being uninsured will be able to enroll for coverage sooner, instead of being forced to wait for the next enrollment period,” Mr. Doggett, representative of Texas said. People are realizing that having health insurance is a law is being enforced.
This is a big issue for medical insurance companies because the enrollment period keeps getting pushed back. Due to this they are unable to forecast their expenses accurately, which leads them to offer prices that may not be as accurate.
This snowball effect lands on the consumers because they will have to purchase coverage at a higher rate. It is the first full year of the affordable care act and people will have to learn.