HHS Messed Up 800,000 Obamacare Tax Forms

Taxpayers received incorrect information about their subsidies.

The Internal Revenue Service Building. From the GSA's website: http://www.gsa.gov/portal/ext/html/site/hb/category/25431/actionParameter/exploreByBuilding/buildingId/470#
National Journal
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Sam Baker
Feb. 20, 2015, 5:31 a.m.

About 800,000 people re­ceived tax forms with in­cor­rect in­form­a­tion about their Obama­care cov­er­age, of­fi­cials from the Health and Hu­man Ser­vices De­part­ment said Fri­day.

The er­rors oc­curred on a new form that helps Obama­care en­rollees fig­ure out wheth­er they qual­i­fy for a sub­sidy that would pay all or part of their premi­ums, and how big that sub­sidy should be. In­form­a­tion used to cal­cu­late those sub­sidies was wrong on about 20 per­cent of tax forms, HHS of­fi­cials said. The er­rors would cause some tax­pay­ers to claim too large a sub­sidy and oth­ers to claim less than they’re ac­tu­ally eli­gible for.

Andy Slavitt, prin­cip­al deputy ad­min­is­trat­or of the Cen­ters for Medi­care and Medi­caid Ser­vices, said the agency is already no­ti­fy­ing tax­pay­ers of the mis­take and will be send­ing out re­vised forms. The “vast ma­jor­ity” of Obama­care en­rollees haven’t filed their taxes yet, and can simply use the new, cor­rec­ted in­form­a­tion when they do, Slavitt said. But, of the 800,000 people who re­ceived in­ac­cur­ate forms, about 50,000 have already filed their taxes, Slavitt said.

The IRS is fig­ur­ing out how to handle those re­turns. Obama­care’s sub­sidies are tied to the cost of “bench­mark” plan in each re­gion. But these 800,000 tax forms list the wrong premi­um for those plans. Slavitt said HHS is still in­vest­ig­at­ing how the er­ror oc­curred.

The 800,000 er­rors af­fected people who live in the 37 states us­ing Health­Care.gov for en­roll­ment. State-run ex­changes send out their own tax forms — and those doc­u­ments were er­ror-prone, as well. Cali­for­nia’s ex­change re­portedly mailed 100,000 in­cor­rect tax forms to its Obama­care en­rollees.

— Cor­rec­tion: An earli­er ver­sion of this story in­ac­cur­ately stated that con­sumers re­ceived these forms from the IRS. They were ac­tu­ally sent by HHS.

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