Study Projects Equal Repayments and Refunds for ACA Tax Subsidies

A new study by the Kaiser Family Foundation estimates that taxpayers receiving advance premium tax credits (APTC) are about as likely to owe some repayment (50%) as receive a refund (45%). The remaining 5% will see no change to the tax credit amount. Subsidy-eligible households with starting incomes under 200% of the poverty line are more likely to owe a repayment (54%) and less likely to receive a refund (40%). The size of the estimated average repayment ($794) is very similar to the estimated average refund ($773). Findings are based on tracking income changes (prior year vs. current year) typical of the subsidy-eligible population between 2013 and 2014.

Relief Extended for Tax Filers Sent Incorrect Forms

The United States Department of Treasury announced that any or State-based Marketplace enrollee who received an incorrect 1095-A form and used it to file taxes does not need to file an amended return, and that the IRS will not pursue the collection of any additional taxes from these individuals. Further details regarding when to submit an amended return were provided in an FAQ. This announcement comes on the heels of CMS’ statement that additional errors have been identified on some 1095-A forms since its first announcement that incorrect information was sent to approximately 800,000 individuals. CMS noted that 90% of those who received incorrect 1095-A forms from have received corrected forms, and that the remaining 80,000 should receive corrected forms this week.

House and Senate Republicans Advance Budget with Repeal of Affordable Care Act and Medicaid Cuts

Early budget activity reveals bills in both the House and Senate for the 2016 fiscal year that seek to eliminate the federal debt by 2025 through cuts to trillions of dollars from healthcare and welfare programs. Both the House and Senate supported a repeal of the Affordable Care Act and funding Medicaid through block grants. Additionally, the House proposed turning Medicare into a premium support system where retirees would purchase insurance on the private market with government subsidies. The Republicans’ budget contrasts sharply with the initiatives put forth by President Obama’s budget and is likely to meet resistance.

Administration Releases Final Rule on Employer-Sponsored Wraparound Benefits for Exchange Plans

On March 18, the Departments of Health and Human Services, Labor, and the Treasury published a rule that will allow employers to provide some limited additional benefits to their employees who purchase coverage in Exchanges. Previously, the ACA did not allow employees to receive both an employer-subsidy to buy health coverage and the ACA premium tax credit, frustrating some employers and labor unions. The new rule allows this wraparound coverage on a very limited basis for: (1) part-time employees or (2) all employees for whom the main coverage is unaffordable, but only if the employees purchase a “multistate” plan offered by a health insurer under contract with the U.S. Office of Personnel Management (OPM) and the wraparound coverage is approved by OPM, which may result in improving access to better coverage for some lower income employees.

16.4 Million Adults Receive Health Insurance Coverage from ACA

According to data released by HHS, about 16.4 million previously uninsured people have gained health insurance coverage since the Affordable Care Act was enacted. This number includes 2.3 million young adults (aged 19 - 26) who were able to remain on a parent's plan until age 26, and 14.1 million adults who gained health insurance coverage since October 2013. Overall, the uninsured rate dropped to 13.2% of the population down from 20.3% in 2012. The greatest decline in the uninsured rate was among African Americans and Latinos, declining 9.2% and 12.3%, respectively, since 2013. The total uninsured rate remains lowest among Caucasians at 9.0% compared to 13.2% for African Americans and 29.5% for Latinos. States that chose to expand Medicaid saw the largest decrease in uninsured rates where families with incomes at 138% of the federal poverty level or less experienced a drop of 13 percentage points, nearly twice that seen in non-expansion states.