Customer Support Center

TOPIC GUIDE –Failure to Reconcile AdvancedPremium Tax Credits

Introduction

This topic guide provides an overview of how agents can help customers that failed to file their taxes and reconcile any advance payment of the premium tax credits received.

Contents

  • Overview of Failure to Reconcile (FTR) requirement
  • Customer notifications
  • Key information for working with customers
  • Washington Healthplanfinderattestation question
  • Appeals

Overview

Washington Healthplanfindermust discontinue tax credits and cost-sharing reductions for 2017 coverage for customers who received tax credits in previous years, but did not file an income tax return and reconcile tax credits for that year (or if the primary tax payer did not reconcile on the enrollee’s behalf).

What does it mean to “reconciletax credits”?

  • Reconciliation by tax filing enables the Internal Revenue Service (IRS) to compare the amount of tax credits paid in advance based on the customer’s estimated income with the final tax credit the customer is eligible for based on their actual income, for the year during which they received tax credits.
  • Enrollees who received tax credits are required to file an income tax return including the IRS Form 8962 to reconcile the amount of advance payments of the premium tax credit (based on estimated household income).
  • This requirement applies even if the customer otherwise would not file an income tax return.

Customer notifications

  • Washington Healthplanfindermailed open enrollment notices October 2016 to enrollees explaining possible risks for losing tax creditsin 2017.
  • Customers affected by any one of these reasons will get the same notice. The reasons are:

1. Not authorizing Washington Healthplanfinder to request updated tax information

2. Failure to file a tax return

3. Updated tax information indicates the household income is too high to receive tax credits

4. Customer’s Important Information notice will be on their dashboard for customers and agents to read.

Key information when working with customers

IRS and tax filing information

  • Washington Healthplanfinder relies on the IRS for information on whether a tax payerhas filed and reconciled advanced premium tax credits for all enrollment years.
  • The IRS may send Washington Healthplanfinder this information for a tax payer in any of the following situations:
  • When new applications are submitted
  • When applications are updated
  • When applications are auto renewed
  • IRSdata will take time to update after a tax payer files and reconciles their tax credits
  • It takes the IRS about 3 – 10 weeks to process a tax return, depending on how it’s filed (paper vs. electronic)

How to help customers who file and reconcile late

  • Encourage all customers to return to Washington Healthplanfinderafter their tax return has been processed to update their application. See Washington Healthplanfinderattestation question section below.
  • Coverage effective date will follow the 15thrule.
  • Customer should select a new plan or same plan using special enrollment period.

How to help customerswho lose tax credits and then get eligibility for tax credits back for next year’s coverage

  • If a customer files their tax return afterthe tax filing deadline (April),they may still be able to receive tax creditsthey were eligible for when they filetheir taxes next year.

How to help customerswho are concerned they received excess advance payments of the premium tax credit, i.e. may have received tax creditstheyshould not have

  • Encourage the customer to make sure their income is accurate in Washington Healthplanfinder.
  • Encourage the customer to visit the IRS website at more information, or to contact a tax professional.

Washington Healthplanfinder Attestation Question

Washington Healthplanfinder “Special Enrollment Questionnaire” screen

Question: Someone in my household has filed taxes after being denied health insurance premium tax credits for not filing taxes.

  • Click radio button Yes or No
  • Question should not show on brand new applicants.

How to file an appeal after documents have been submitted and denied

If customershave filed atax return and have submitted proof of that filing, but Washington Healthplanfinderhasdenied theirrequest for tax credits, theyhave the right to appeal this decision to a judge at an administrative hearing. The appeal must be filed within 90-days of the date on the notification that stated they’vebeen denied tax credits after providing proof of theirIRS tax filing. If theydecide to appeal, they can complete the Appeals Form available at

  • Appeals is not intended for first call resolution.

Tax Filing Reconciliation

Existing/Change Reporting Clients

SEP Qualifications
  1. At least one member on the application has indicated that they have reconciled taxes recently when they had been previously denied.
Reporting Requirements
  1. Report on SEQ screen only
  2. Indicate “Yes” to the event type “Reconciled Taxes...”
  3. The system will determine the household eligible for an SEP due to this reason if there is not another event reported with anearlier start date.
Additional Information
  1. No date will be collected from the user for this question, system defaults to current system date.
  2. The Special Enrollment end date will be 60 days from the current date
  3. Only applicable to those applying for free or low cost coverage

Final approved by Schaff and Donbeck

07-28-20171