1. The Affordable Care Act
Taxes,
The Affordable Care Act
and You
Click here to add notes

2. What We’ll Discuss Today
ACA Tax Impacts and You
Advance Premium Tax Credit
ACA Tax Penalty & Exemptions
Resources
Welcome to our presentation today. Thank you for joining me here.
My name is __________. I’m a [TITLE] and have been with H&R Block for [number of years] and am [talk briefly about your certifications].
Today, we’re going to talk about the Affordable Care Act and how it may impact your taxes – and potentially affect your refund this year.
Today we’ll go through:
How the ACA may affect your tax return this year
Talk about the Advance Premium Tax Credit – what it is and how it works
Talk about the ACA Tax Penalty, how it may affect you and what exemptions are available to you
And lastly, some helpful resources you can refer to after today
I expect this should be about an hour with lots of time for questions and answers at the end.
Before we get started I first wanted to ask you if there are any specific things you wanted to make sure I cover here today [open to audience, acknowledge questions and note that you’ll do your best to address in the presentation and if not, you will be happy to discuss afterwards too]
… great, let’s get started

3. ACA has created a new intersection between Health Care & Taxes
The ACA has created a new intersection between health care and taxes.
Why? Because 3 key healthcare-related elements are being administered through your tax return. They are:
Reporting if you and members of your household have qualified health insurance
Accounting for any Government financial assistance you received to help pay for your insurance through the state or federal insurance ‘Marketplace’ [or say the name of your state Marketplace, for example; Covered California]
Determining a penalty or exemption, if you or a household member don’t have insurance
But what’s most important is to be aware IF YOUR taxes will be impacted. And that’s what we want to focus on today.
Health Care

4. ACA Tax Impacts
As part of the ACA, almost everyone is now required to have and maintain qualified health insurance coverage.
The first step in knowing if you will be affected is to know that, as part of the Affordable Care Act, almost everyone in your household is now required to maintain qualified health insurance coverage.
There are two key terms here I want to flag for you:
The first is “tax household” – It’s important to note that, for purposes of ACA, only the people you can claim on your tax return are considered members of your tax household. That means: you, your spouse, your children, or other people you can claim as dependents.

5. Not Qualified Coverage
What is “qualified” health insurance coverage?
Qualified Coverage
Not Qualified Coverage
Insurance through your job, COBRA or retirement plan
Some student health insurance
Medicare, Medicaid, TRICARE or CHIP
Marketplace health insurance
Short-term medical coverage
Accident or disability only coverage
Dental and vision only plans
Travelers insurance
Medicare supplemental plans
The second key term is “qualified” health insurance (aka minimum essential coverage):
When determining if you have health insurance that’s considered ‘qualified’ under the ACA, there are some types that won’t pass the test and are not considered qualified health coverage.
Those include: short term medical plans, accident or disability only coverage, dental and vision only plans, travelers insurance, and Medicare supplemental plans.
If you have insurance you receive through your job, COBRA, insurance that’s part of a retirement plan or coverage through government programs like Medicare, Medicaid, Tricare and CHIP and Marketplace health plans --- that’s all considered qualified and means you meet the requirement to have health insurance.

6. ACA Tax Implications
Now let’s get to the heart of the matter – the ways the Affordable Care Act may affect your tax return – and possibly affect your refund – this year.

7. ACA Tax Impacts Employer Government and Private Insurance
Low Tax Impact
75% taxpayers
HIGH Tax Impact
25% taxpayers
Employer Government and Private Insurance
Advance Premium Tax Credit
ACA Tax Penalty and Exemptions
There are 3 different categories that just about everyone – whether you have insurance or not – will fall under when it comes to the ACA. Each of these categories will have an effect on your tax return. They are:
You have insurance from your employer, a government plan (Medicaid, Medicare, CHIP, TRICARE, etc.), or a private health plan bought directly from an insurance company outside the Marketplace
You got insurance through the federal marketplace or state marketplace [just say the name of your state marketplace instead, e.g. “Covered California”] and you received the Advance Premium Tax Credit to help pay for your monthly premiums
You don’t have insurance and may have to pay the tax penalty
Today we’re going to really focus on numbers two and three as they will have the greatest impact on your tax return this year.
And for those people who fall into the first category because you have insurance through your employer, it’s still good to know the implications, as they may affect someone in your family.
So let’s walk through each of these now.

8. Employer Government and Private Insurance
Insurance Coverage Documents
Beginning with the 2015 return filing year, insurance coverage is verified using information documents known as 1095’s:
1095-A: Marketplaces
1095-B: Small employers, government plans such as Medicaid, Medicare, CHIP, and TRICARE, and insurance companies
1095-C: Large employers
Low Tax Impact
75% taxpayers
Employer Government and Private Insurance
Let’s start first with those of you who already have health care insurance through your employer.
This counts as ‘qualified’ health insurance under the Affordable Care Act and is the likely scenario for about 75% of all taxpayers.
You will need to have a 1095 series document showing you have health insurance coverage so that you aren’t hit by any potential fees for not having insurance.
1095-A: Marketplaces issue 1095-As to individuals who have coverage through a state or federal marketplace
1095-B: some small employers, government plans such as Medicaid, Medicare, CHIP, and TRICARE, and insurance companies will issue 1095-B documents to individuals
1095-C: Large employers will issue 1095-Cs to employees who are covered by the employer plan as well as to those that are not covered by the plan but could have been had they accepted the coverage offer.
1095 documents should be mailed to taxpayers by January 31, 2017 in most cases, however, employers may request up to two 30-day extensions to provide these documents to their employees.
If you have questions about that we can discuss more in the Q&A portion of today’s presentation.
Now let’s look at the two categories who will be the most affected this year. First up, those who received the Advance Premium tax credit.

9. Are you eligible ? Yes, if you…
What is the Advance Premium Tax Credit?
Are you eligible ? Yes, if you…
Enroll in a federal or state Marketplace health insurance plan
Household income falls within certain levels
Are a US citizen or have residency documentation
Don’t have access to affordable health insurance through your employer or programs like Medicare or Medicaid.
Do not file MFS
So let’s talk first about the Advance Premium Tax Credit.
You may have heard this be called a subsidy but it’s actually a tax credit that the government provides to help give financial assistance to help lower the monthly cost of health insurance.
You can only get this credit if you were enrolled (or re-enrolled) through the federal or state Marketplace, like [name state marketplace if it’s relevant in your state. For example, if you’re in California just say “through the federal marketplace or Covered California”]
Your tax credit was estimated based on your household income and family size to determine how much of a credit you were eligible for
The Premium Tax Credit may be sent directly to your health insurance company and applied to your monthly health insurance premium to lower the monthly cost.
You may be eligible for the credit if … [go through list on the slide]
If you don’t meet any of these criteria there are other forms of assistance that you can receive and won’t affect your tax return. Let me know if you’re interested in hearing more about this and we can discuss after the presentation.

10. Health Insurance Premium Cost Advance Premium Tax Credit
The Advance Premium Tax Credit
How It Works
Per Month
Estimated Annual
Household Income
Health Insurance Premium Cost
(before credit)
Advance Premium Tax Credit
(after credit)
Single
$25,000
$175
$104
$71
Married, Family of 4
$60,000
$533
$343
$190
When you enroll in a Marketplace health insurance plan, you are asked to provide an estimate of your household income.  This estimate, along with your family size, is used to determine your eligibility for the Advance Premium Tax Credit.  It’s also used to determine how much tax credit assistance you receive.   
After you enroll in a Marketplace health insurance plan and are determined eligible for the Tax Credit, this tax credit is typically ADVANCED to your health insurance company on your behalf and directly applied to your monthly health insurance premium, to lower your monthly cost. This occurs throughout the year.

11. How the Advance Premium Tax Credit may impact your tax refund
IF YOU GET AN ADVANCE PREMIUM TAX CREDIT…
YOU MUST RECONCILE YOUR CREDIT…
WHICH MAY RESULT IN…
If your actual household income was higher than you estimated, you may need to repay some or all of the credit you received.
If you estimated your household income correctly, you will not have to repay any of the credit you received.
If your actual household income was lower than you estimated, you may get money credited to your return when you file.
If you and/or a member of your household received the Advance Premium Tax Credit, you must file a tax return so that the credit can be reconciled. If you did not file a tax return or reconcile your Advance Premium Tax Credit in a previous year when you were required to, you may have to amend that return before claiming the credit again.
When we talk about reconciliation what we mean is that the amount of the credit you received – which was based on your estimated annual income – will be compared against what credit you’re eligible for based on your actual income. There are two key ways this could affect you:
If your actual household income was HIGHER than you estimated – you may have to pay back some or all of the credit you received – up to the maximum repayment cap amount. This will likely reduce the amount of your tax refund, or add to your taxes due.
If your actual household income was LOWER than you estimated – you may get money credited to your return.
Let’s look at a more detailed example.

12. Dan & Lucy 2016 Estimated 2016 Actual Tax refund (-$1,815)
Income $50,000
ACA Tax credit $1,180
Tax refund
(-$1,815)
Income $38,000
ACA Tax credit $2,995
Meet Dan and Lucy. Dan is currently the sole household earner and works for a small employer that doesn’t provide health insurance.
Last January, when Dan heard about the new health insurance Marketplace he applied for the Advance Premium Tax Credit through the Marketplace to help pay for his insurance and estimated his household income would be $38,000 because that’s what he made the year before.
Based on his estimated income, they were eligible to receive the Advance Premium Tax Credit in the amount of $249 a month to lower their monthly health insurance cost.
In April, Lucy started a part-time job.
Now, Let’s fast forward to January 2017.
Because they enrolled in a Marketplace health plan, they receive the 1095-A form, which indicates that they received a $2,995 Advance Premium Tax Credit.
Originally, Dan estimated their household income for 2016 would be $38,000. However, since Lucy got a part-time job, their actual household income was $50,000.
Because their household income was higher than expected, they were actually only eligible for an Advance Premium Tax Credit of $1,180 for the year.
But they received $2,995.
They will have to pay the government back $1,815 for the excess tax credit, which will now be taken out of their refund.
There are a few things you can do to make sure that you’re accurately estimating your income if you take the Advance Premium Tax Credit – and so that it won’t impact your refund next year:
Estimate your household income as accurately as possible – you can use your AGI listed on prior year’s tax return
Make sure to include income from all members of your household who have income above the filing threshold
Make sure to notify the Marketplace if you have any changes to your household income or composition (you get a raise; your husband, who was unemployed, gets a new job, etc.)

13. We cannot complete your return without it!
The Advance Premium Tax Credit
Form 1095A
Don’t forget to bring your 1095-A form issued by the Marketplace to your tax appointment.
We cannot complete your return without it!
If you or a member of your household received the Advance Premium Tax Credit, you will receive Form 1095-A from the Marketplace.
Don’t forget to bring this form to your tax appointment. We cannot complete your tax return without the 1095-A form. It should be mailed to you by the Marketplace by the end of January. If you don’t receive it, you should be able to access a copy through your Marketplace account or by contacting the Marketplace.
Added: You may also receive Forms 1095-B and 1095-C sometime in March or early April. If you have these forms, bring them with you to your appointment, but if not, your tax professional should be able to complete your return without them.

14. Open Enrollment and APTC Impacts to 2017 open-enrollment
2015 APTC Recipients: If you had health insurance through a Marketplace last year and received APTC to help pay premiums:
You are required to file a 2015 tax return and reconcile APTC.
You have to file, even if you don't meet any of the other typical filing criteria.
If you don’t file, you will not be eligible for APTC in the 2017 coverage year.
The Marketplace will check with IRS to ensure required returns were filed.
If you haven’t filed, do so as soon as possible to ensure a smooth 2017 open enrollment. Even if you filed an extension, you should file as soon as possible.
2017 Open Enrollment:
Begins Nov. 1, 2016 and ends Jan. 31, must enroll by Dec. 15, 2016 to ensure coverage begins Jan. 1, 2017.
Automatic re-enrollments for the 2017 coverage year for current Marketplace enrollees that do not contact Marketplace by Dec. 15, 2016
If you had health insurance through a Marketplace last year and received an Advance Premium Tax Credit (APTC) to help pay premiums:
You are required to file a tax return and reconcile the APTC using Form 8962.
You have to file, even if you don't meet any of the other typical filing criteria.
If you don’t file, you will not be eligible for APTC in the 2017 coverage year.
As part of the open enrollment process, the Marketplace will check with IRS to ensure that you filed your 2015 return and to verify your income. If there is no 2015 return filed and you received APTC in 2015, the Marketplace will enroll you in a plan without APTC. This means you will have to pay your entire insurance premium.
If you haven’t filed, do so as soon as possible to ensure a smooth 2017 open enrollment.
Open enrollment for 2017 begins Nov. 1, 2016 and ends on January 31, If you want to have insurance effective January 1, 2017 you must enroll by December 15, For those that had Marketplace plans last year, the Marketplace will automatically re-enroll you in a plan on December 15, 2016 if you do not enroll. Everyone with Marketplace coverage should contact the Marketplace and update their information to ensure income and family information is updated and review coverage to determine if the current plan meets their needs.

15. Penalties and Exemptions
Now that we’ve talked about the first two ways the ACA could affect your tax return this year, let’s talk about the third category.
This applies to anyone who did not have health care insurance during the year and may now face a penalty that will be applied through the tax return.

16. What is the ACA Tax Penalty?
$695 per adult OR
2.5% of taxable household income (minus the minimum filing amount)
Whichever amount is greater!
The penalty amount is the greater of:
$695 per adult member of your household ($ for dependents under 18) OR
2.5% of household taxable income less the minimum filing amount.

17. Greater of the two = ACA Tax Penalty!
Vicki and Ray
Married Couple with
Household Income of $65,000
1 adult x $695 = $695 OR
2.5% x ($65,000 –$20,700) = $1107
So, what does this look like? Here’s another example:
Ray is an independent contractor and is currently uninsured but his spouse Vicki is covered under her employer’s plan.
Together their household income is about $65,000 and they file jointly.
Even though Ray knows about the potential fee related to not having health insurance, he thinks that at most it will only cost him $695, which is much less than insurance would cost him.
When Ray and Vicki go to file their taxes, they find that Ray does not qualify for any exemptions. They will have to pay the ACA Tax Penalty.
Ray learns that his penalty will be $1107, not $695, because $1107 is 2.5% of his income minus the minimum filing threshold
The fee will be deducted from their tax refund.
Greater of the two = ACA Tax Penalty!

18. Do you qualify for an exemption?
Claimed on the Tax Return
Household income is below filing threshold, but taxpayer files anyway to claim a credit
Gap in coverage that is no more than 2 months
Granted by Marketplace
Unpaid medical expenses
Caring for an ill, disabled or aging family member
The good news is that many people may qualify for an exemption to reduce or eliminate their ACA Tax Penalty. In fact, there are more than 30 exemptions you can apply for that fall into two categories:
Exemptions you claim on your tax return like:
The minimum coverage amount is considered unaffordable,
If you’re a non-U.S. citizens without valid immigration documentation,
If your household income is below the minimum filing amount
And there are many other options available that may apply to your situation
There are also exemptions that are granted by the Health Insurance Marketplace. You may be eligible for these if you are:
A member of a religious sect with objections to insurance, or a US citizen living abroad, etc.
Or if you meet one of the 15 hardship exemption criteria, which are available for those who experienced homelessness, eviction, foreclosure, bankruptcy, or those who were denied Medicaid and live in a current non-expanded Medicaid state
You can find a full list of exemptions here:
H&R Block can help you determine which exemptions you qualify for and help you file the proper paperwork with the IRS.

19. Marketplace Exemption
Trisha
$25,000 annual Income
No insurance
$1390 tax penalty
Marketplace Exemption
Let’s look at an example of where an exemption might apply.
Trisha is a single mother who can claim two children as dependents. Neither she nor her two children had health insurance coverage in 2016
Trisha’s annual household income is $25,000 but she still feels she cannot afford health coverage even though she is eligible for the Advance Premium Tax Credit.
Trisha went through tough economic times this past year and was evicted from her rental apartment. She and her children are currently living with friends until she can get back on her feet.
When Trisha goes to file her 2016 taxes, she learns that she may face a potential ACA Tax penalty of $1390.
However, Trisha’s ACA Tax Specialist finds that because Trisha suffered an economic hardship, she may qualify for an exemption granted by the Health Insurance Marketplace, which may eliminate her tax penalty. Trisha will need to apply for the exemption through the Marketplace.
In this instance we would be able to help you identify what kind of exemption you’re eligible for and walk through the process of claiming the exemption as well.
The best way to make sure you don’t have to deal with the ACA penalty is to make sure you’re enrolled in a qualified health insurance plan for all 12 months of the year

20. ACA Tax Impacts Employer Government and Private Insurance
Low Tax Impact
75% taxpayers
HIGH Tax Impact
25% taxpayers
Employer Government and Private Insurance
Advance Premium Tax Credit
ACA Tax Penalty and Exemptions
To recap –individuals without insurance will see smaller refunds as the Affordable Care Act is phased-in.
Remember if you fall into one of the 3 categories that we just discussed, your tax return will be affected by the Affordable Care Act this year, especially if:
You got insurance through the federal marketplace or state marketplace [just say the name of your state marketplace instead, e.g. “Covered California”] and you received the Advance Premium Tax Credit to help pay for your monthly premiums,
You don’t have insurance and do not qualify for an exemption, or
Someone in your family falls into one of the above categories.

21. Final Tips & Resources
Before I open for some Q&A there are some resources I wanted to let you know about:

22. Licensed Health Care Advisors are available by phone.
H&R Block can help you enroll in health insurance
FREE access to trained, certified and licensed Health Care Advisors
UNBIASED health plan comparisons, selection, advice and enrollment
HELP applying for the Advance Premium Tax Credit to lower the cost of health insurance
Licensed Health Care Advisors are available by phone.
Check out our enrollment support.
Our health care advisors can help you find and enroll in a Marketplace health plan that best fits your needs and budget, as well as help you apply for the Advance Premium Tax Credit to lower the cost of your monthly health insurance premiums, for free.
You can also visit our health insurance website at healthcare.hrblock.com to estimate your advance premium tax credit and view plan options in your area.
And you can feel free to reach me at [local information – or note that your business cards are available after the presentation]
Call HR BLOCK
or visit us online at healthcare.hrblock.com

23. Why risk a mistake on your taxes?
Why seek a tax expert…
Between 2001 and 2013, IRS compliance activity increased significantly:
Face-to-face audits by 66%.
Mail audits by 103%.
Unpaid balance investigations by 79%.
Automated underreporter investigations by 272%.
Lien filing and levies issues by 127%.
Taxpayers' appeals cases by 81%.
Accordingly, from 2001 to 2014, the IRS increased the number of notices it sent annually by 570%.
Why risk a mistake on your taxes?

24. Taxes are complicated…
Taxes are complicated and the tax code even more so! Ask yourself:
Are you keeping up with the latest tax law changes?
Are you applying new tax laws correctly and to your advantage?
Are you sure you are getting the most refund possible?
If the IRS calls are you prepared to answer?
If you answered NO to any of these questions,
schedule an appointment TODAY with a tax expert at H&R Block.

25. Questions?

26. Thank you.
I’ll be at the back of the room to answer any additional questions you have, and if you’d like, I can set you up with an appointment.