Who is keeping track of whether I buy health insurance through the exchanges?

Q: Who is keeping track of whether I buy health insurance through the exchanges?

A.  Regardless of where you get your health insurance, you (and the IRS) will receive a tax form from your employer, insurance company, or exchange each year showing that you had coverage during the previous year. The information on these forms is used to complete your tax return and – if applicable – reconcile your premium subsidy on your return.

The health insurance exchanges keep track of who gets exchange-based coverage, and report that information to the IRS. But health insurers and employers also report information to the IRS, for people who get their coverage elsewhere; the requirement that people maintain health insurance coverage is not just based on the honor system.

And tax returns now ask everyone whether or not they had health insurance throughout the year. The information that’s reported from employers, insurers, and exchanges is used to verify the information that tax filers provide to the IRS when they file their returns. This reporting process will continue to be used, relatively unchanged, for 2017 and 2018 tax returns.

Starting with 2019 tax returns (filed in early 2020), tax filers will no longer face a penalty if they were uninsured during the year, but Forms 1095-A and C (although probably not B) will still be distributed to exchange enrollees and employees, and Form 8962 will still be used to reconcile premium subsidies, as the subsidies will continue to be available.

Employers will still have to report coverage offers to the IRS and employees, as subsidy eligibility is based in part on whether the person has access to an employer-sponsored plan. And exchanges will still have to provide the information that individuals and the IRS need in order to reconcile subsidy amounts. In short, health insurance will continue to be part of our tax returns for the foreseeable future.

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Related terms

health insurance exchange

individual mandate


premium subsidies

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