800K Receive Incorrect Tax Forms Because of HealthCare.gov Glitch

February 23, 2015 in News

On Friday, the Obama administration announced that an intermittent coding error on HealthCare.gov caused roughly 800,000 U.S. residents who enrolled in health coverage through the site to receive incorrect tax statements, the Wall Street Journal reports.

The error affects up to 20% of the statements sent to individuals who received subsidies to purchase coverage through the federal exchange (Radnofsky, Wall Street Journal, 2/20).

Error Details

The error is related to a new government form, 1095-A, that works like a W-2 for health care subsidy information (Alonso-Zaldivar, AP/Washington Times, 2/20).

According to officials, some of the 1095-A forms presented the wrong value for the local premium, which influenced other calculations. Officials said the problem stemmed from an intermittent coding error, which caused some forms created in January to use 2015, rather than 2014, local premium data (Wall Street Journal, 2/20).

As a result of the error, taxpayers could claim a subsidy that is either higher or lower than that for which they are eligible, according to National Journal (Baker, National Journal, 2/20).

According to the Wall Street Journal, IRS is reviewing how to address the estimated 50,000 individuals who have already filed their taxes using the incorrect forms. The 750,000 individuals who have not yet filed are being asked to wait until they receive statements with corrected information (Wall Street Journal, 2/20).

Individuals can determine whether they have received a correct form by checking their accounts on HealthCare.gov or by phoning the federal customer service center, AP/Washington Times reports.

Reaction

White House spokesperson Josh Earnest said the error affected “a small percentage of overall tax filers,” adding, “[y]ou’re talking about less than 1% of people who file taxes” (AP/Washington Times, 2/20).

Meanwhile, Rep. Diane Black (R-Tenn.) and other Republican lawmakers lambasted the Obama administration over the error. “The Obama administration has built a health care law so complex, so confusing and so costly that even they don’t know how to properly administer it,” Black said.

Separately, Mark Ciaramitaro, vice president of health care services at HR Block, said, “The unfortunate reality is that for many of these impacted taxpayers, the tax refund could be the single largest financial payout of the year.” He added, “For those who have not filed, through no fault of their own, they are being told to wait to file a tax return, further delaying access to their tax refund” (Wall Street Journal, 2/20).

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