This blog was last updated on June 27, 2021
Even in the initial years of a new tax information reporting requirement, filers hope to meet their obligations with as few errors as possible. However, one Affordable Care Act (ACA) health care exchange made a large mistake in sending 100,000 incorrect 1095-A forms, The Los Angeles Times reported.
The error lies in a discrepancy for some customers. These individuals’ customer information differed from the data with their health plans. This issue has affected nearly 13 percent of the 800,000 households Covered California sent forms to. A spokesperson said the exchange will send revised 1095-A forms where necessary.
Aftermath of incorrect forms
Although the adjusted forms will be available, the error represents an oversight. Considering many individuals are already confused about what forms they should receive for ACA tax reporting, sending incorrect forms adds to the confusion and could cause taxpayers to ask more questions of their health care providers when forms arrive.
AllGov California noted many taxpayers sought to get help with their taxes for ACA forms this year before the error came to light, especially as individuals had trouble calculating penalties. The ACA has many moving parts, and although the health care law doesn’t affect many organizations during the 2015 tax season, all organizations must be aware of how its complexity can affect them next tax season.
Lessons for employers and insurers
The situation in California warns other reporting entities to avoid making a similar mistake, such as organizations that will need to send forms – 1095-B and 1095-C – for the 2016 tax season, when self-insured employers, large employers and insurers must begin ACA reporting.
Throughout 2015, these entities must keep track of data for each individual covered under their health insurance offerings. For many, the new data collection process will be a significant undertaking, and organizations can’t allow for mistakes. As employers and insurers gather information for the 2016 tax season, they must ensure customer data is correct and synchronized across different areas.
Organizations will already have their hands full with comprehending their own ACA reporting obligations and answering member and employee questions about the new tax forms, so they must avoid adding more to their plates with errors.
