The APTC reconciliation process compares two figures:
1. The amount of APTC paid on behalf of the consumer or a member of their tax household
during the year based on their estimated household income and household size for the
year; and
2. The amount of PTC the consumer qualifies for based on their actual household income
and household size for the year
Any difference between the two figures will affect a tax filer’s federal income tax refund or tax
owed.
Navigators in the Federally-facilitated Exchanges (FFEs) are required to help consumers with
Marketplace-related components of the APTC reconciliation process and with understanding the
availability of IRS resources on this process, including:
1. Obtaining Internal Revenue Service (IRS) Form 1095-A, Health Insurance Marketplace
Statement, and Form 8962, Premium Tax Credit (PTC), and providing general
information on these forms;
2. Understanding how to report errors on Form 1095-A;
3. How to find Silver plan premiums, including the second-lowest-cost Silver plan (SLCSP
or “benchmark” plan) premiums, using the Health Coverage Tax Tool at HealthCare.gov;
and potential consequences for consumers for whom APTC was paid during two consecutive
tax years and who failed to file and reconcile for both tax years.
Additionally, Navigators are required to refer consumers to licensed tax advisers, tax preparers,
or other resources for assistance with tax preparation and tax advice related to consumer
questions on APTC reconciliation.
Failure to File and Reconcile
Failure to Reconcile (FTR) Determination
Note: At the time of this publication, the Centers for Medicare & Medicaid Services (CMS) has
suspended FTR operations and will not end APTC eligibility for a consumer merely because
APTC paid for the consumer for a prior tax year has not been reconciled.
FTR occurs when APTC for individuals who have Marketplace coverage is not reconciled
because the individual, or the tax filer responsible for reconciling the individual’s APTC, fails to
file their federal income tax return for the year of coverage or files a return but does not include
Form 8962 with the return. Prior to Open Enrollment (OE), the Marketplace checks IRS data to
determine if federal income tax returns were filed and APTC was reconciled for the most recent
tax year(s) for which data is available. If APTC for an individual has not been reconciled when
the Marketplace requests income verification data from the IRS about the individual, the IRS will
return a response to the Marketplace indicating that the individual’s APTC has not been
reconciled (referred to as having an “FTR status”).
Consumers with an FTR status typically receive Marketplace notices warning them to file their
federal income tax returns and reconcile past APTC immediately and to attest on their
application during OE to having filed and reconciled, if they have, in fact, done so. Then, in the
new year following OE, the Marketplace performs a recheck of IRS data to verify that those who attested to filing and reconciling on their application during OE actually filed their federal income
tax returns and reconciled their APTC. This process is called “FTR Recheck.”
Effective June 18, 2023, an individual’s FTR status will result in the individual being ineligible for
APTC only if the individual’s APTC has not been reconciled for two consecutive years
(specifically, years for which tax data will be utilized for verification of household income and
family size). However, CMS has temporarily paused FTR operations until the Department of
Health and Human Services (HHS) and the IRS are able to implement the new FTR policy for
plan year 2025.
Prior to the pause in FTR operations, Marketplace enrollees who didn’t update their applications
to attest to filing and reconciling and get automatically re-enrolled in coverage for the new plan
year would have had their APTC removed effective January 1 of the new plan year. When FTR
operations are resumed, enrollees will have their APTC removed effective January 1 of the new
plan year if they fail to file and reconcile their past APTC for two consecutive years, rather than
one.
Regaining APTC
Beginning with plan year 2025 eligibility determinations, if consumers fail to file federal income
tax returns and reconcile APTC for two consecutive tax years, as verified with IRS data,
consumers may lose their APTC. If a consumer is found to have failed to file and reconcile
APTC for two consecutive tax years, consumers must file a federal income tax return and
reconcile past APTC immediately for the applicable tax years to remain eligible for APTC for the
new plan year.
Consumers who remain enrolled in full-cost coverage after losing APTC eligibility can return to
the Marketplace and attest to filing and reconciling after they have done so. The consumer will
then become eligible for APTC again (if otherwise eligible) and will be eligible for a Special
Enrollment Period (SEP) to make changes to their enrollment and can apply APTC to their plan
prospectively. This SEP is only available to current enrollees.
Consumers who drop coverage because they lost APTC and then file a federal income tax
return and reconcile APTC as required must qualify for a different type of SEP to re-enroll in
coverage with APTC or wait until the next OE. Consumers can find more information on SEP
qualifying events at HealthCare.gov/coverage-outside-open-enrollment/special-enrollmentperiod/
Exemptions to Obtain Catastrophic Coverage
Consumers no longer need to report to the IRS whether they had full-year health care coverage
or qualify for an exemption since the individual shared responsibility payment is $0. However,
consumers age 30 and older who wish to purchase Catastrophic coverage through the
Marketplace must apply for an exemption through the Marketplace and obtain an Exemption
Certificate Number (ECN). Consumers under age 30 do not need to claim an exemption or
obtain an ECN if they wish to purchase Catastrophic coverage.
There are two types of exemptions:
1. Affordability (income-related). A consumer could qualify for this exemption if the lowestpriced coverage available to them, through either a Marketplace or job-based plan, would
cost more than 7.97% (for 2024) of their household income.
2. Hardship. A consumer could qualify for this exemption if they had a financial hardship or
other circumstance that prevented them from getting health insurance.
Catastrophic health insurance plans have low monthly premiums and very high deductibles.
They may be an affordable way for consumers to protect themselves from worst-case scenarios,
like getting seriously sick or injured. But with a catastrophic plan, consumers will be required to
pay for most routine medical expenses themselves.
If a consumer is eligible for an exemption, Catastrophic health plan options will display when the
consumer shops for coverage through the Marketplace.
Comments
0 comments
Please sign in to leave a comment.