This year my engagement in tax season did not start and end, as it typically does, with the latest Turbo Tax software and single W-2 form. Instead the season for me, and probably for some of you, began a lot earlier and revolved around a trio of brand new Affordable Care Act (ACA) tax forms.
In January, EverThrive Illinois began receiving inquiries from Illinois Navigators who were encountering consumers with questions about how health coverage, or the lack thereof, would affect their 2014 federal taxes. In an effort to help Navigators make sense of the 1095-A form and differentiate a 8965 from a 8962, we worked with our partners at The Sargent Shriver National Center on Poverty Law, Center for Economic Progress, Community Catalyst and Spitfire Strategies to put together a webinar and a flowchart Navigators could reference to help guide concerned consumers.
In helping to prepare these resources, I gained valuable knowledge about the requirements for consumers under the Affordable Care Act. But I also was learning that ACA-related tax provisions were just a few of many variables in a long and confounding tax equation a family needs to navigate in order to file their taxes. To better understand and address consumer questions related to these ACA tax provisions, and also advocate for improved implementation of these policies in the future, I would need to dive deeper into the tax world.
Just as I had encouraged consumers with complicated tax questions to consult tax preparers, I pursued a similar approach with my tax inquiry. Volunteer Income Tax Assistance (VITA) sites provide free tax preparation for individuals with incomes below $25,000 and families with incomes below $55,000 filing federal and state taxes. Directed by the IRS and managed by local non-profits (such as the Chicago-based Center for Economic Progress), VITA sites are located across the country and are staffed primarily by unpaid volunteers. After participating in a two-hour in-person training and completing an online IRS code of conduct exam, I became a VITA volunteer in February.
On Monday and Thursday evenings for several weeks, I traveled to a community college in downtown Chicago where a VITA site sets up shop every year from January to April. My role entailed helping consumers understand and complete the VITA-required paperwork that my colleagues, the tax preparing volunteers, would then use to actually file taxes. I checked to make sure clients had their W-2’s, helped to determine who was included in their household for tax filing purposes, and asked the all-important question, “Did you have health insurance coverage last year?”
Of the 60 or more questions I was required to ask a client, I always spent the most amount of time on this question. Many VITA clients were enrolled in expanded Medicaid coverage, but I also came across a fair number of individuals who were uninsured and had incomes just above the Medicaid threshold. I discussed the individual shared responsibility requirement with them, and rarely came across clients who were surprised by the penalty.
However, most did not know the specific costs associated with the penalty and very few were aware of the opportunity to enroll in health coverage for 2015 under the Special Enrollment Period (SEP). While I always provided the contact information for our state Marketplace so the client could call and make an appointment with a Navigator to explore this opportunity for coverage, I’m not sure how many clients actually ended up enrolling in coverage. Had a Navigator been present at the VITA site to provide immediate assistance and help the consumer learn more about the SEP I am sure that more consumers would have pursued accessing health insurance.
My VITA tax preparing colleagues also shared the questions they often encountered related to the individual mandate and the challenges they faced explaining the requirement to enroll in coverage or reconcile any Advanced Premium Tax Credits (APTC) to clients. Perhaps unsurprising, given that this was the first year implementing these ACA tax provisions, knowledge of the shared responsibility provision and APTC reconciliation varied among VITA volunteers. Uneven understanding of the individual mandate appears to be true of other paid tax preparers as well, as evidenced by reports of some preparers incorrectly subjecting DACA residents to the individual mandate. Just as EverThrive IL and other health advocacy organizations work with health care and social service providers to help them better understand ACA policies and how they affect clients, I think there remains great opportunity to partner with VITA sites—and possibly other tax preparers—to further educate staff and volunteers about the policies, penalties, and opportunities related to health coverage for their clients under the ACA.
As tax season came to a close, so did my volunteer experience. I still have a long way to go to understand the ins-and-outs of the tax filing process, but a few short weeks at a VITA site helped me grasp just how confusing and time consuming it can be for consumers to meaningfully engage in the tax and health coverage worlds —especially if forced to navigate both at the same time. Fortunately, there are organizations and hardworking volunteers dedicated to providing consumer assistance in both of these fields. By engaging in formal partnerships and coupling these services when possible, the non-profit enrollment assistance and volunteer tax preparing communities have unprecedented opportunity to help consumers improve their financial stability and also access health coverage.
To learn more about VITA sites and opportunities to volunteer, please visit the IRS VITA website.
- Alicia Siani, EverThrive IL Health Reform Coordinator
EverThrive Illinois, formerly the Illinois Maternal and Child Health Coalition, works to improve the health of Illinois women, children, and families over the lifespan through community engagement, partnerships, policy analysis, education, and advocacy.