A train wreck has occurred on the way to health coverage for allin the U.S. Forty percent of households that received subsidies for their coveragein 2015 haven’t properly filed 2014 tax returns yet and, in theory,won’t be able to apply for a subsidy in 2016 as a result.

That’s what the Treasury Department determined after comparingtax filers with those who’d received subsidies. A report from theAssociated Press/Washington Times said the Treasury identified theproblem when reviewing tax records of the 4.5 million householdsthat got subsidies. Of the 1.8 million who are at risk of losingsubsidies:

  • 760,000 filed their tax forms but didn’t include Form 8962, thesubsidy tracking form;

  • 710,000 simply didn’t file a tax return;

  • 360,000 requested an extension.

The Internal Revenue Service, in an attempt to address theissue, wrote to those who hadn’t yet filed by July, suggesting theydo so within 30 days in order to preserve their subsidies.

There’s also been a lag in coordinating tax filings between theTreasury and other departments involved in health care reformtracking due to the addition of Form 8962.

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Dan Cook

Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.