1. URBAN INSTITUTE 1 Tax Preparers and Reaching the Eligible Uninsured Stan Dorn, Senior Fellow The Urban Institute sdorn@urban.org 202.261.5561 Council for Electronic Revenue Communication Advancement May 21, 2014 s

2. URBAN INSTITUTE 2 Overview I.Potential impact of tax preparers reaching the eligible uninsured II.Timing III.A voluntary covenant

3. URBAN INSTITUTE 3 POTENTIAL IMPACT OF TAX PREPARERS ON REACHING THE ELIGIBLE UNINSURED I.

4. URBAN INSTITUTE 4 Federal income tax filers, as a percentage of the uninsured who qualify for health coverage 3.8 million Source: Dorn, Buettgens, Dev, 2014 (HIPSM-ACS). Notes: Estimates understate the prevalence of federal income tax filing as compared to administrative data.

5. URBAN INSTITUTE 5 Federal Income Tax Filing among the Uninsured Who Qualify for QHP Subsidies, by Age Source: Dorn, Buettgens, Dev, 2014 (HIPSM-ACS). Notes: Estimates understate the prevalence of federal income tax filing as compared to administrative data. 0.4 million4.2 million

6. URBAN INSTITUTE 6 Tax Preparation Method, by Adjusted Gross Income, 2008 AGI Total returns (millions) Tax preparation method No identified preparer Paid preparer IRS- prepared return Volunteer income tax assistance Tax counseling for the elderly Under $30,000 67.940.9%55.8%0.3%1.5%1.6% $30,001- $50,000 25.441.7%56.7%0.1%0.8% $50,001- $100,000 31.040.0%59.1%0.0%0.3%0.5% >$100K18.335.4%64.4%0.0%0.1% Total:142.640.1%57.8%0.1%0.9%1.0% Source: Dorn, Buettgens, Dev, 2014. Urban Institute Tax Policy Center analysis of IRS 2008 Statistics of Income.

7. URBAN INSTITUTE 7 Health program eligibility among various groups of EITC-eligible people (assuming Medicaid expansion) Source: Dorn, Isaacs, et al. 2013 (TRIM3, HIPSM 2012). Notes: Assumes that all states expand Medicaid eligibility for adults to 138 percent FPL.

8. URBAN INSTITUTE 8 Other benefits of engaging tax preparers Help completing paperwork Leveraging the penalty for uninsurance at its moment of maximum persuasive power –When it is being enforced to take away a refund Lowering monthly premiums –Average tax refund in the $20,000-$50,000 AGI range exceeeds $2,700 per return –If some or all of the refund could be directed to pay annual QHP premiums, more affordable coverage Addressing tax reconciliation

9. URBAN INSTITUTE 9 TIMING II. s

10. URBAN INSTITUTE 10 Open enrollment 2015 November 15, 2014 through February 15, 2015 –Previous proposed period ended on 1/15/15 Modest overlap with tax filing season possible Families USA proposal –Special enrollment through 4/15/15 –If uninsured taxpayer pays penalty for going without coverage in 2014, brief opportunity to enroll into QHP for 2015

11. URBAN INSTITUTE 11 Open enrollment 2016 and beyond HHS has now officially suspended judgment –Earlier proposal: 7 week open enrollment period, mid-October through early December Alternative calendar –Open enrollment, 7 weeks ending on 3/31 –Plan year starting on 5/1, ending 4/30

12. URBAN INSTITUTE 12 Pros and cons of alternative calendar Advantages Can use tax preparers QHPs seem more affordable in tax refund season than holiday season Carrier staff and brokers more available when no overlap with ESI & Medicare open enrollment Less burden of employer verification. EINs allow verification by data match. Avoids perceived unfairness of forcing people to remain uninsured and pay penalty Disadvantages More complex tax reconciliation Need for transitional QHP plan year Some workers leave ESI for QHPs mid-year, rather than in January

13. URBAN INSTITUTE 13 A VOLUNTARY COVENANT III.

14. URBAN INSTITUTE 14 Issues Challenges facing tax preparers –Not much cooperation from federal and state policymakers Concerns from a number of consumer groups about past activities of some unscrupulous for-profit tax preparers

15. URBAN INSTITUTE 15 Voluntary covenant concept Policymakers offer tax preparers assistance they need to efficiently and sustainably help numerous uninsured clients receive health coverage To qualify for that assistance, tax preparers can, if they wish, choose to live up to a “gold seal” code of conduct promulgated by leading health consumer groups

16. URBAN INSTITUTE 16 What assistance could best help tax preparers enroll numerous uninsured clients? Favorable publicity from, e.g., the Governor “Back-end” data base forms that preparers could populate with client data, eliminating the need to use websites to enroll clients into coverage Guaranteed acceptance of specific application forms Funding for successful Medicaid applications What else?

17. URBAN INSTITUTE 17 Possible gold seal requirements 1.Discounted tax preparation services for low-income clients during open enrollment 2.Competent tax preparation (e.g., fulfilling continuing education requirements) 3.Competent assistance with all health subsidy programs, either directly or through a contractual partner 4.No loans for health insurance premiums (but can have full or partial refunds directed to help pay QHP premiums) 5.Either directly or through contractual partner— a.Certified navigators/assisters/brokers b.No additional charge for health application c.No preferential presentation of particular plans

18. URBAN INSTITUTE 18 Conclusion Most eligible uninsured are not yet enrolled in coverage Tax preparers offer a remarkable chance to reach the eligible uninsured Taking advantage of that opportunity will require close collaboration between policymakers, consumer groups, and the tax preparer community

19. URBAN INSTITUTE 19 Information sources Stan Dorn, Matthew Buettgens, Jay Dev. “Tax Preparers Could Help Most Uninsured Get Covered.” Prepared by the Urban Institute for the Robert Wood Johnson Foundation, Feb. 2014. http://www.urban.org/UploadedPDF/413029- Tax-Preparers-Could-Help-Most-Uninsured-Get-Covered.pdfhttp://www.urban.org/UploadedPDF/413029- Tax-Preparers-Could-Help-Most-Uninsured-Get-Covered.pdf Stan Dorn, Julia Isaacs, Sarah Minton, Erika Huber, Paul Johnson, Matthew Buettgens, and Laura Wheaton. “Overlapping Eligibility and Enrollment: Human Services and Health Programs Under the Affordable Care Act.” Prepared by the Urban Institute for the Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services, Dec. 2013. http://www.urban.org/UploadedPDF/413028-Overlapping- Eligibility-and-Enrollment-Human-Services-and-Health-Programs-Under-the- Affordable-Care-Act.pdf.http://www.urban.org/UploadedPDF/413028-Overlapping- Eligibility-and-Enrollment-Human-Services-and-Health-Programs-Under-the- Affordable-Care-Act.pdf