It’s Tax Day!

Happy Tax Day! Yeah, we know it’s not really happy, but at least it will soon be over.

This year’s tax filing deadline is an interesting one for those of us in the insurance industry because it marks the day that millions of Americans will report whether or not they had health insurance coverage during 2014, apply for an exemption or pay a penalty if they did not, and, for some of them, learn for the very first time about the individual mandate.

It is shocking to think that some people could have remained blissfully unaware of the individual shared responsibility requirement for the past five years, but, nonetheless, some did. And for those people who were surprised to learn when they filed their taxes that they may owe an individual mandate penalty, HHS created a special enrollment period for this year only. Between March 15 and April 30, people who live in states using the Federally Facilitated Marketplace who 1) didn’t know about the penalty until they were filing their taxes, 2) owed a penalty for 2014, and 3) have paid the penalty can special enroll in individual health coverage so that they won’t owe a penalty for 2015.

Well, today we’re learning that not a lot of people are taking advantage of this special enrollment opportunity. According to USA Today, “nearly half of people planning to file taxes said they had heard nothing or very little about the requirement to report whether they have insurance on their tax return,” but, as Kathy Hempstead from the Robert Wood Johnson Foundation explains, “Very few people are reacting to the news by insuring.” Through March 29, only about 36,000 people had taken advantage of the special enrollment opportunity.

While the individual reporting requirement may have come as a surprise to some, the advance premium tax credit reconciliation process may be an even bigger surprise. As the Wall Street Journal reports, taxpayers who incorrectly estimated their 2014 income when they were applying for a premium tax credit may get a higher refund if they underestimated or a lower income if they overestimated. The timely article tells the stories of several individuals who either missed out on the tax credit or saw their refund reduced because their income ended up being higher than expected.

These articles seem to confirm that people don’t understand health insurance and they certainly don’t understand taxes – and, as brokers know all too well, most people don’t listen when we try to tell them. Awareness issues can be even higher when people try to “do it themselves” by going to or their state exchange to purchase coverage. On the other hand, those who enroll through a broker-owned private exchange site are able to talk with licensed insurance professionals who will explain their options and guide them through the enrollment process.

To learn more about this year’s tax filing requirements, be sure to check out our four-part series about the new tax forms.

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