Forms Recently Released related to the Affordable Care Act
The IRS recently released the final drafts of two forms related to the Affordable Care Act, but the law itself may face another Supreme Court Challenge that would render it and the forms obsolete. Below are excerpted sections from IRS.gov, the ACA Review, and INC.com.
Health Insurance Premium Tax Credit
Starting in 2014, individuals and families can take a new premium tax credit to help them afford health insurance coverage purchased through an Affordable Insurance Exchange (also known as a Health Insurance Marketplace).
The premium tax credit is refundable, so taxpayers who have little or no income tax liability can still benefit. The credit can be paid in advance to a taxpayer’s insurance company to help cover the cost of premiums. On May 18, 2012, the Department of the Treasury and the IRS issued final regulations, which provide guidance for individuals who enroll in qualified health plans through Marketplaces and claim the premium tax credit, and for Marketplaces that make qualified health plans available to individuals and employers.
On July 24, 2014, the Department of the Treasury and the IRS issued proposed, temporary and final regulations providing further guidance on the premium tax credit. In particular, the regulations provide relief for certain victims of domestic abuse or spousal abandonment from the requirement to file jointly in order to claim the premium tax credit. In addition, the regulations provide special allocation rules for reconciling advance credit payments, address the indexing in future years of certain amounts used to determine eligibility for the credit and compute the credit, and provide rules for the coordination between the credit and the deduction under section 162(l) for health insurance costs of self-employed individuals. Rev. Proc. 2014-41, also released on July 24, 2014, provides methods for determining the section 162(l) deduction and the premium tax credit for health insurance costs of self-employed individuals who claim the deduction under section 162(l).
From ACA Review:
Health Coverage Exemptions
On July 24, 2014, the IRS posted preliminary, unofficial drafts of forms that the ACA compels employers, plan administrators and employees to file, inter alia, to certify coverages offered and provided to employees in 2015. They are Form 1094-B (“Transmittal of Health Coverage Information Returns”), Form 1094-C (“Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns”), Form 1095-A (“Health Insurance Marketplace Statement”), Form 1095-B (“Health Coverage”), Form 1095-C (“Employer-Provided Health Insurance Offer and Coverage”), Form 8962 (“Premium Tax Credit”) and Form 8965 (“Health Coverage Exemptions”).
Insurers and self-insured plans will file Form 1095-B and provide copies to all enrollees, using the 1094-B transmittal Form. Large employers will file Form 1095-C, using transmittal Form 1095-B, with copies to all employees. Form 1095-A is a notice from the ACA Exchange to those who enrolled in coverage through the Exchange. Subsidized Exchange purchasers will file Form 8962. Individual mandate exemptions are claimed on Form 8965.
The IRS release suggests that further mandate enforcement delays are not under consideration. Though the official forms and instructions for their use will not be available for months, this early look should help employers and their benefit administration partners assess the significant administrative burdens to come.
Another Supreme Court Challenge?
Meanwhile, the prospect looms for yet another challenge of the entire law before the US Supreme Court. Or not.
In the four years since the ACA became law, more than 100 lawsuits have been filed to stop its implementation. While most of these were based on constitutionality or the birth control mandate, they culminated with a series of rulings that left the law largely intact. That may change next spring, when the High Court is expected to take up the issue again – one of four major suits weaving its way through the district courts.
The impetus in this case is a ruling of the US Court of Appeals for the District of Columbia in the case of Halbig vs. Burwell. In that case, announced in late July, the Court of Appeals ruled in favor of the plaintiffs. The three-judge panel agreed that the wording of the ACA makes it illegal to offer tax subsidies to people who have enrolled via federal exchanges for health care subsidies. The case argues that the language of the health care law provides for subsidies only to customers from states that have set up their own exchanges.
On the same day, however, a Virginia federal circuit court judge handed down an opposing decision in a similar case, siding narrowly with the federal government in the case of King vs. Burwell.
Sources: Internal Revenue Service at http://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions-for-Employers; www.inc.com.