Oooops! California sends out 100,000 inaccurate Obamacare tax forms

Democrats are gloating over the 11 million people who have signed up for Obamacare in the last two years. Aside from the fact that they are celebrating that 11 million people are simply obeying the law. one might question what is the more significant number; 11 million who are forced to purchase insurance or the 25-30 million who are not obeying the individual mandate?

It hardly matters. Forbes resident Obamacare scholar, Avik Roy, who we have quoted many times at AT, delves into the administration numbers, and not suprisingly, finds a lot of fudging.

Fudging numbers is one thing. What about incredible incompetence? In California, the state has sent out about 100,000 Obamacare tax forms that are inaccurate. Many thousands of others never even received the form.

The kicker: The state knew the forms were inaccurate but sent them out anyway.

CBS Local:

“After being on hold for 59 minutes, they told me that the 1095-A was never generated,” Scoggins told KPIX 5 ConsumerWatch.

She’s talking about the 1095-A form, a document required for enrollees to file their tax returns. It’s a problem, for the recent widow who desperately needs to file now.

“I need my tax refund,” Scoggins said.

And she’s far from the only Covered California enrollee with 1095 problems. About 100,000 or 12 percent of the forms generated by Covered California have inaccuracies.

“We realized the data wasn’t exactly the same,” Covered California spokesperson Dana Howard told KPIX 5.

Howard said the problems are largely due to discrepancies between Covered California’s records and the information used by insurance companies. The inaccuracies include dates of coverage, number of family members enrolled and policy changes.

“There are some of these that are going to need reconciliation,” Howard said.

But he said Covered California sent them out anyway, to beat the February 2nd deadline.

“We did not want to hold up sending out the 1095s to everybody, so that we can correct those that we did have,” Howard said.

How very kind of them. Those inaccuracies will force consumers into the problem resolution black hole at the IRS.

Howard said corrected forms should be going out at the end of the month. But if those forms have additional errors, enrollees will have to file a dispute and wait another 60 days for a response, putting them well past April 15 and in some cases resulting in extended filing fees or interest on taxes owed.

When asked if Covered California would pay for interest fees, Howard said, “We will be able to look at the dispute form, and get it completed and resolved as quickly as we possibly can.”

Nationwide, a new survey shows that about half of all Americans who don't have insurance don't realize that  they will have to pay a penalty.

The study, using data from December, found that roughly 25 percent of uninsured people above the poverty line had heard "nothing at all" about the penalty, and around 20 percent had heard "only a little." Fifty-three percent had heard some or a lot.

Under ObamaCare, people without health insurance who do not qualify for an exemption must pay a penalty. For those lacking coverage in 2014, the penalty is $95 or 1 percent of an individual's annual income, whichever is greater. The penalty more than doubles for 2015.

The low awareness is at the center of a growing push to get the Obama administration to give people another chance to get insurance through ObamaCare before the penalties take effect.

The administration is considering adding another enrollment period for people who realize as Tax Day approaches that they have to pay a penalty for not having insurance. The deadline for open enrollment this year was Feb. 15.

“Millions upon millions of people are unaware about these penalties,” Ron Pollack, the executive director of the nonprofit group Families USA, which is pushing for the new period, said on Wednesday.

The IRS will simply take the penalty out of taxpayer's refund. If it isn't enough, they will bill them.

The CBO estimates that after exemptions are added up, about 6 million uninsured taxpayers will have to pay the penalty. Another 3.4 million will be forced to pay the IRS because the subsidies they received were too generous. That's roughly 9 million Americans who are going to get a nasty surprise when the IRS informs them their refund may be considerably smaller than they expect.

So let the Democrats continue to gloat over absolutely nothing. If they celebrate Americans obeying the law by buying insurance, one can imagine the partying that goes on when they make a complete stop at a stop sign, or pay their taxes before April 15. It's a much bigger political statement that tens of millions of Americans still refuse to sign up for Obamacare.

Somehow, that notion always gets lost in the translation.


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