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Meet IRS Form 1095-A

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Officials at the Internal Revenue Service have been plowing ahead with efforts to set up the machinery needed to make the Patient Protection and Affordable Care Act (PPACA) health insurance exchange system work.

PPACA calls for the exchanges, or Web-based health insurance supermarkets, to offer premium tax credits for moderate-income consumers who cannot get affordable, high-quality coverage from their employers.

In “Information Reporting for Affordable Insurance Exchanges” (Reg-140789-12) (RIN 1545-BL42), a set of draft regulations, the IRS has proposed the rules exchanges would use to report on consumer tax credit eligibility to the IRS and tell the consumers what information was flowing to the IRS.

An exchange would send information about the individuals enrolled in the “qualified health plans” (QHPs) sold through the exchange every month, “on or before the fifteenth day of the month following the month of coverage,” according to the preamble to the proposed regulations.

“Each taxpayer or responsible adult who enrolled, or whose family member enrolled” in an exchange QHP would get a summary of the information going to the IRS on a new form, the Form 1095-A.

An exchange would have to send the statement to the taxpayer or responsible adult “on or before January 31 of the year following the calendar year of coverage.”

The draft regulations are set to appear in the Federal Register Tuesday. Comments on the draft regulations will be due 60 days after the official publication date.

In related news, the IRS also has published two batches of advice explaining how IRS officials are interpreting the premium tax credit rules.

In IRS Notice 2013-41, officials talk about how potential access to coverage through special health insurance programs, such as a state Children’s Health Insurance Program (CHIP) plan or the TRICARE health plan for military dependents, might affect eligibility for exchange premium tax credits.

Some individuals, for example, lose eligibility for Medicaid or CHIP coverage because they fail to pay their share of the premiums for those programs.

Officials said people who lose Medicaid or CHIP benefits because they fail to make their premium payments will not be eligible for exchange premium tax credits.

Some individuals are eligible for state high risk pools, student health plans, TRICARE programs, and “Medicare Part A coverage requiring payment of premiums” and are actually enrolled in those programs.

If the people are enrolled in the programs, they will not be able to get the exchange premium tax credit.

People who are eligible for the special health programs and actually enrolled in the programs will be able to get the premium tax credits, officials said.

Officials noted that determining whether individuals really qualified for programs such as state high-risk pools is complicated.

Public comments on the notice are due Aug. 26.

In another notice, IRS Notice 2013-42, officials talk about how to interpret the PPACA rules for individuals who are eligible for employer-sponsored health plans with plan years that start on a date other than Jan. 1.

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