With April 15 (Tax Day) less than two months away, it’s no surprise that H&R Block, the largest tax services firm in the world, is already busy processing tons of 1040 forms. What is unexpected, though, is that they’re advising their customers on health insurance as well as taxes.
This year, if you come to H&R Block for tax prep, you’ll also get a free, personalized review on what your insurance costs are likely to be, and what subsidies you might qualify for under the Affordable Care Act, which really kicks in for most people in January 2014.
“We discovered that three out of four taxpayers don’t know what it takes to become eligible for health insurance under the new law,” said Kathy Pickering, executive director of The Tax Institute at H&R Block, referring to a survey the company did that also found that 44 percent of respondents ages 18 to 34 didn’t know about the possible tax penalty if they didn’t sign up for health insurance with an employer or a state health insurance exchange. (Sign-up for insurance under the exchanges begins October 1, 2013.)
Tax returns aren’t as far removed from health insurance as you might think. While it’s not necessary to file a tax return to enroll in a qualified healthcare plan, according to the tax preparer, people who do file a return will find it’ll be used by state exchanges to verify your household income and family size to determine eligibility for government-sponsored plans, the premium tax credit (a tax refund to help offset health insurance costs for some individuals and families), and subsidies. In other words, having a tax return handy this fall may make it easier and faster to figure out if you’re eligible for financial help in paying for your insurance. People who don’t file a return may be asked to submit documents to help determine eligibility and costs.
So far, no other tax preparation firms have announced plans to help their clients with health insurance questions. H&R Block has launched a website that anyone can use to see some family and individual scenarios for healthcare and penalty costs. The site also has a good FAQ section that explains certain parts of the new healthcare law, such as “Will there be changes in my taxes because of health care reform?” (Yes, but not for everyone.)
While H&R Block customers who opt for the health insurance review may feel a little more at ease about the coming new world of health insurance, you won’t be missing out if you’re not getting your taxes done there. Beginning July 1, 2013, all states will have call-in centers set up to answer questions about health insurance under the Affordable Care Act, as well as “navigators” who can provide specific information based on individual or family circumstances, says a spokesman for the U.S. Department of Health and Human Services. Each state exchange will make specific decisions about how the navigators operate, for example, call-in hours, and, in some cases, probably in-person appointments. Sign up at Healthcare.gov to get health insurance updates from your state exchange by email or text message.
And you can also expect more companies and nonprofits to start offering counseling on health insurance in the months ahead. “We’re taking a lot of calls from people who are concerned about being able to afford coverage in 2014,” says Keith Mendonsa, a consumer specialist at the online health insurance company ehealthinsurance.com. “Most of them don’t understand how the subsidies will work and what they’ll be required to pay for their coverage. There’s a lot of room for consumer education on the issue this year.”
Michael Hsiung of Los Angeles says he “kept hearing about new subsidies for people who can’t afford health insurance and wondered if I’d be one of them…but I had already gone so long without health insurance I didn’t want to keep waiting,” he explains. “So I bought a plan for $105 and will wait to see what happens with the Affordable Care Act.” Hsiung’s plan is a month-to-month one, based on guidance from the sales person he worked with at ehealthinsurance.com, who pointed out that he may qualify for a lower-cost option once the health insurance exchange in California opens for business.
Are you afraid of what health insurance might cost you starting in 2014? Have you spoken to a tax preparer or accountant or do you plan to?
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Fran Kritz is a freelance writer specializing in health and health policy who lives in Silver Spring, Maryland.