More than 1.1 million low-income individuals and families enrolled in Covered California receive financial assistance – called “Advanced Premium Tax Credits (APTCs)” – to lower the cost of their health insurance, but many of them may not be aware that filing a federal tax return is a condition of eligibility for that financial help.
A Covered California consumer must file taxes for each calendar year that they received APTCs. If they fail to file taxes, this is called “Failure to Reconcile.” A consumer who loses eligibility for APTCs will have to pay the full premium amount and higher cost sharing for health care services, a heavy hit to their pocketbook.
The National Health Law Program and other advocates have been working closely with Covered California to make sure consumers are not caught off-guard when they lose their APTCs. In fact, in 2017, we sent a letter to CCIIO and Covered California about legal concerns with the consumer notice, which confusingly gave 3 different reasons an enrollee might lose their financial assistance. In part due to our urging, Covered California finally fixed the problem with the notices and are now planning to send out new letters to all the enrollees who are about to lose their financial assistance.
In early April, the IRS gave Covered California permission to send a series of notices to the at-risk consumers. Today through April 15, 2019, Covered CA is mailing a warning notice to roughly 50,000 Covered California households that are in jeopardy of losing their APTCs. This notice will go to consumers who in 2017:
- Received APTCs in the calendar year but did not file a federal tax return
- Filed a federal tax return but did not include IRS Form 8962; or
- Requested an extension to file a federal tax return but did not end up filing the return.
It is critical that these consumers act by May 15, 2019 to preserve their APTCs, by reconciling their APTCs and contacting Covered California to attest to having reconciled their APTCs. If consumers fail to take these steps, they will receive another notice in a pink envelope that tells them when their financial assistance will end if no action is taken. Consumers who failed to take corrective action will lose their current financial help starting July 1, 2019.Consumers, or advocates who work with these health care consumers, should watch for these letters and act immediately to fix the problems so enrollees do not lose the critical financial assistance with their health care coverage. Consumers who need assistance should contact the Health Consumer Alliance at 888-804-3536. The National Health Law Program will be monitoring this roll out closely and provide any updates as things develop.
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