The woes haven’t ended for enrollees who had first-year sign-up troubles through the state’s health insurance exchange.
Officials with Nevada Health Link said Wednesday that some consumers sent the wrong paperwork to qualify for an exemption from a federal tax for being uncovered in 2014.
Bruce Gilbert, the exchange’s executive director, said there’s “no way” to tell how many Nevadans filed incorrectly, but he said he started hearing from such consumers about a week and a half ago.
“I think the letters with respect to federal penalties are just starting to go out. This is the first we’re hearing of it,” Gilbert said. “As people receive these letters and look for the right way to resolve the situation, we thought we would reach out to customers and (insurance) brokers.”
At issue is the form consumers must file for exemptions from the federal tax.
The IRS agrees that Nevadans who couldn’t get through the enrollment process shouldn’t have to pay the tax.
“We have consulted with the Internal Revenue Service and confirmed that our consumers will not be punished for something over which they had no control,” Gilbert said. “Any Nevadan prevented from obtaining coverage due to a technology failure is eligible for an exemption from the individual-responsibility penalty.”
State contractor Xerox launched an incomplete enrollment website for Nevada Health Link in October 2013. Software glitches kept thousands from signing up in the first enrollment session. In March 2014, Xerox had a “pends” list of more than 10,000 consumers — about a third of its first-year customer base — who had trouble paying for or receiving a plan.
The IRS’ tax-exemption document, Form 8965, doesn’t list exceptions for people who faced technical glitches enrolling. So some consumers have simply declared “general hardship.”
The problem is, general hardship is a category for economic and personal stresses such as foreclosure, eviction, domestic violence, unpaid medical bills or the death of a close family member. It doesn’t cover sign-up troubles.
One Nevadan who claimed a hardship exemption because of enrollment problems received a denial notice in late June from the Centers for Medicare and Medicaid Services, which oversees implementation of the Affordable Care Act that created the insurance exchange.
The consumer will face a noncoverage tax unless he resubmits his Form 8965 with a code of “G” in the column indicating exemption type.
For a sample form showing how to properly file for an exemption, visit nevadahealthlink.com, scroll down to “2014 Tax Information,” and click on the update on 2014 coverage exemptions for system issues.