800,000 Obamacare consumers sent incorrect tax info

Once again, the administration is terrified of political blow back from Obamacare. I wrote yesterday of nearly 100,000 Obamacare consumers being mailed wrong tax information from Covererd California, the Obamacare insurance exchange.

A few hours after that was posted, the IRS announced that 800,000 taxpayers had been mailed incorrect information and should wait to file their taxes until they receive a new form. That won't help the 40,000 or so people who have already filed their taxes based on the erroneous information. The IRS hasn't said what they'll do with those taxpayer's returns.


"The White House tells us in a classic Friday news dump that nearly one million Americans could see their tax refunds delayed because of this president's inability to implement his own law," Tennessee Representative Diane Black said in a statement.

White House spokesman Josh Earnest said the glitch should have no impact on the ability of people to file their taxes by the April 15 deadline. He also said the issue affects "less than 1 percent of people who file taxes."

The administration also said it would extend a special enrollment period for tax filers who were unaware they could face penalties for missing the Feb. 15 deadline to obtain health insurance through the federal marketplace at HealthCare.gov.

The one-off special enrollment period will be extended from March 15 to April 30. If consumers do not buy health insurance during this period, they will have to pay a penalty when they file their 2015 taxes. Eligible filers must live in one of the 37 states with a federally facilitated insurance marketplace.

State-based insurance exchanges can set their own policies, officials said.

To qualify for the special enrollment, consumers must attest that when they filed their 2014 tax return they paid the fee for not having health coverage that year and that they first became aware of the implications of not enrolling in a timely manner after they began preparing their 2014 taxes.

The IRS has estimated 2 percent to 4 percent of tax filers, or roughly six million people, may pay a fee for not having coverage in 2014, which is $95 or 1 percent of income.

The fee increases to $325 per adult or 2 percent of income for 2015. Those who enroll during the special period will still owe fees for the months they were uninsured in 2014 and 2015. The special period is to allow people to avoid additional fees for 2015.

Cheerleading for the administration, the New York Times reminds us that everything else about the second enrollment period for Obamacare is hunky-dory.

The tax mistake, affecting taxpayers in 37 states, is the first major problem to surface in an otherwise smooth second enrollment period for the Affordable Care Act. The online insurance marketplaces have exceeded enrollment targets, and insurance premiums have generally come in lower than expected. Nonetheless, the mistake could cause some hardship for thousands of lower-income Americans who qualified for subsidized insurance, had hoped for tax refunds and now must wait for weeks to file their taxes.

In the immortal words of defense secretary, Albert Nimzicki, in Independence Day, "That's not entirely accurate."

In fact, they exceeded enrollment expectations because they lowered the target number not once, but twice. And while the overall premium increase is relatively small - thanks to brow beating the insurance companies to hold the line on increases - the more expensive plans have seen double digit increases in many states.

And the Times article didn't mention the nearly 4 million taxpayers who will owe the IRS because their subsidies were figured incorrectly. Nor does the article give the reason for the extra enrollment period; roughly half of the 6 million taxpayers who will have to pay the penalty for not having insurance are unaware that they will owe the IRS money.

Only about 60% of the Affordable Care Act has been implemented. Over the next two years, the employer mandate will completely kick in, with the CBO expecting 10 million workers to be thrown off their insurance and on to the tender mercy of the state exchanges. Millions more will lose their full time job and be forced into part time employment.

The Times is trying to convince us that things are going swimmingly for Obamacare. In fact, the nightmare is just beginning.