Tom Schrette and Alan Cash

Tom Schrette and Alan Cash

Dear Tom and Alan:

I have a pretty big problem.

I was on Covered California and received a subsidy during 2015. I had no health insurance at all during 2016 and so far this year. My tax preparer said he assumed I had coverage all through last year and into this one.

Meanwhile, the IRS sent me a letter saying they want to see a copy of my 1095-A for 2016.

Don’t know what that is, but when I called Covered California they said to call a certified insurance agent. That’s where I found you guys.

Can you help?


Tom: Yes we can…somewhat. First, we are “certified insurance agents” with Covered California. However, unless we are the ones who signed you up, the IRS won’t talk to us unless you’re right here with us in the office.

Second, form 1095-A is the form you show to your tax preparer but then keep for yourself.

It is basically a one-page document that shows what your premium was and how much of a subsidy you received to help pay for your coverage.

Since you weren’t covered at all during 2016, you won’t need that particular form.

Al: The Affordable Care Act (ACA or ‘Obamacare’) is still with us and so is the requirement that most people buy health insurance and not be without it for more than three consecutive months.

The penalties (hello there, IRS) for 2016 and 2017 are the same: for an individual, $695 or 2.5 percent of household income, whichever is higher.

According to an article originally in the Kaiser Health Network, some 13 million taxpayers claimed one of many different exemptions and did not have to pay.

Tom: Here are some of the exemptions that may get our reader off the hook with the IRS for not having coverage for the past year and almost nine months:

The most affordable coverage costs more than 8.13 percent of your household income.

You are not required to file a tax return because your income is too low.

You are Native American or eligible for health services through an Indian Health Services provider.

Your religion objects to the use of insurance.

You’re in prison.

You belong to a health-care sharing ministry.

You have been abroad for more than one year.

You qualify for a hardship exemption due an issue such as homelessness, bankruptcy, eviction or similarly trying circumstances.

Personally, I would consider a letter from the IRS as a “trying circumstance”.

Al: According to our source, open enrollment for ACA plans for 2018 runs from Nov. 1 to Dec. 15 this year.

In any case, our strong recommendation to our reader is to follow up with the Internal Revenue Service as soon as possible. They don’t ever forget, but may sometimes forgive.

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Submit questions at schrette@gmail.com or alancash@gmail.com.