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I need some advice on a Obama Care Fine

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I need some advice on a Obama Care Fine

Old 10-13-2016, 06:35 AM
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Default I need some advice on a Obama Care Fine

I will first say this is not a political post . I am not looking to point/counterpoint obama care. I am in an unusual situation and cannot get a clear answer from my accountant or Google or the Healthcare site.

I recently finished up my personal 2015 taxes. Part of that is a fine for no health insurance for the last half of 2015. We had health insurance for the first half of the year with my wifes work. But when we moved out of the area to a new home, we lost the insurance as expected. So we immediately applied for obamacare. We were denied within 30 days because we did not qualify. We appealed and in January 2016 received a response saying the appeal was denied.

From what I understand the loss of existing insurance from a job change/firing/resigning qualifies as an event to get health insurance. Assuming I am accurate, and we were denied, how can we be fined for something that..
A. We applied for as we are suppose to do.
B. Got denied, as we were not suppose to do
C. Have to pay a fine for following protocol?

At least my kids were offered a health plan though NH Healthy Kids, which was a reassurance.

My accountant says there is no opinion on the tax forms to dispute the fine under the circumstances. He is looking into it, but has no resolve. We had to file our taxes with the fine in place and paid.

Why do I have to pay a fine for something I was denied for and could not get?
Any thoughts on this are appreciated.
Jason
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Old 10-13-2016, 06:42 AM
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How much is the fine?
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Old 10-13-2016, 06:45 AM
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Don't know your situation but take a look here: https://www.irs.gov/pub/irs-pdf/i8965.pdf

I only have one or two clients who don't have healthcare so I am not up on the rules that much so this is where I had to look.
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Old 10-13-2016, 06:55 AM
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What was the basis of this denial?
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Old 10-13-2016, 06:58 AM
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Check the box that you had full coverage and call it a day.

I originate mortgages and have reviewed my fair share of tax returns and if the IRS doesn't question self-employed people who show more mortgage interest deduction (for their mansion, second homes and/or boats) than taxable income, then they aren't going to come after you.

The FAIR TAX would take care of all this BS.
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Old 10-13-2016, 07:26 AM
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Originally Posted by anonymous_coward View Post
Check the box that you had full coverage and call it a day.

I originate mortgages and have reviewed my fair share of tax returns and if the IRS doesn't question self-employed people who show more mortgage interest deduction (for their mansion, second homes and/or boats) than taxable income, then they aren't going to come after you.

The FAIR TAX would take care of all this BS.
I will disagree with that. You may see these mortgage interest deductions but I doubt they will send you a copy of the notice they get from the IRS.

I have seen a large increase in letter audits for mortgage interest in the last few years. Once you start getting to $50k in mortgage interest, they start to notice. It won't be immediate either. Most of the letter audits I see are for the 2013 tax year.

It is a pretty easy audit for them. The 1098 the bank sends you is also sent to the IRS so they know how much interest you have and how many loans you have. It will be even easier when they start requiring the lender put the principal of the loan on the 1098 and the property address. I bet those audit will increase a lot when that happens since a lot of preparers slap down whatever forms they are handed.
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Old 10-13-2016, 07:28 AM
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I wouldn't listen to the people advising tax fraud. The fine is not much and with this administration's ( and my guess the next) infatuation with making this nonsense work they may put more emphasis on reviewing missing coverage.
My guess on the fine is that you did not qualify for OBamacare from the website (due to income or enrollment dates which are pretty tough) but they expect you to buy your own policy or do a cobra extension.
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Old 10-13-2016, 07:35 AM
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The fine is $700. Not killer in the end, but hey, that's $700!

The reason is because we "missed the enrollment period" and we should apply later in 2015 for 2016. We did and 2016 is all set.
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Old 10-13-2016, 07:36 AM
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Originally Posted by richeerich View Post
What was the basis of this denial?
I'm interested in the answer to this as well. It appears you would qualify for a special enrollment period. Is it that you were denied a supplement or denied coverage?
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Old 10-13-2016, 07:37 AM
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Originally Posted by Sprockets View Post
I'm interested in the answer to this as well. It appears you would qualify for a special enrollment period. Is it that you were denied a supplement or denied coverage?
That is what I would think. We provided proof of ending coverage for mid 2015. Wasn't good enough. To insurance, no option til 2016 and a fine.
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Old 10-13-2016, 07:40 AM
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I would pay the tax as calculated on the form, then include a letter of appeal about the Obamacare fine. The letter should contain details about your attempts to replace the insurance lost when your wife left her job, with copies of the applications and denials. The letter should be factual and business-like in tone.

I expect that fine will be overturned if you can document a good faith effort to have insurance. Meantime, you will have paid all the tax owed and not face any penalties or interest in case your appeal is denied.
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Old 10-13-2016, 07:40 AM
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Originally Posted by JasonG View Post
That is what I would think. We provided proof of ending coverage for mid 2015. Wasn't good enough. To insurance, no option til 2016 and a fine.
My daughter moved from VA to FL this summer and qualified for a special enrollment period. Not sure what your specific situation is, but it seems odd that you didn't qualify to enroll. Be glad you didn't have any major health issues.
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Old 10-13-2016, 07:45 AM
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Originally Posted by JasonG View Post
That is what I would think. We provided proof of ending coverage for mid 2015. Wasn't good enough. To insurance, no option til 2016 and a fine.

How long after you lost your wife's coverage until you applied on the Exchange. You did apply on the Exchange, correct? Not directly through an insurer? What state do you live in?
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Old 10-13-2016, 07:54 AM
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I did some work with a company that helps other companies comply with the ACA so I know more than most people about the law. The ACA allows for "changes in life circumstances" like losing insurance: https://www.healthcare.gov/coverage-...llment-period/

When you say you you "immediately applied for obamacare (and) were denied..." what do you mean? Did you apply for a low/no cost program and you made too much $$ to qualify? It would be helpful to know what you applied for and the basis for denial.
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Old 10-13-2016, 07:59 AM
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Originally Posted by anonymous_coward View Post
Check the box that you had full coverage and call it a day.

I originate mortgages and have reviewed my fair share of tax returns and if the IRS doesn't question self-employed people who show more mortgage interest deduction (for their mansion, second homes and/or boats) than taxable income, then they aren't going to come after you.

The FAIR TAX would take care of all this BS.
You get a form from your insurance company that goes with your taxes.
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Old 10-13-2016, 08:04 AM
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You should have had Cobra insurance in place before your wife's last day. We had to do the same when my wife switched jobs. It cost me $1800 for one month, so maybe your fine is a better deal than the cost of Cobra. Thank the Man above you didn't need insurance in that gap
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Old 10-13-2016, 08:12 AM
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Originally Posted by fishingfun View Post
You get a form from your insurance company that goes with your taxes.
That is correct and the OP should have received one since he had insurance for part of the year. The dumbasses at the IRS won't know if it was for 1 month coverage or 12 months coverage.

If the OP is going to pay the penalty, then why don't you itemize and make up a bunch of Unreimbursed Business Expenses on your Schedule A to offset the penalty? You would not believe the crap I see written off. Americans (mainly minorities) have learned that tax filing time = big tax refund time by making up URE's and/or side businesses on the Schedule C that show a loss.
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Old 10-13-2016, 08:35 AM
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Originally Posted by anonymous_coward View Post
That is correct and the OP should have received one since he had insurance for part of the year. The dumbasses at the IRS won't know if it was for 1 month coverage or 12 months coverage.

If the OP is going to pay the penalty, then why don't you itemize and make up a bunch of Unreimbursed Business Expenses on your Schedule A to offset the penalty? You would not believe the crap I see written off. Americans (mainly minorities) have learned that tax filing time = big tax refund time by making up URE's and/or side businesses on the Schedule C that show a loss.
This is incorrect. The 1095 Form shows which specific months coverage was in place.

I'm still stumped as to why the OP didn't qualify for a special enrollment period.
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Old 10-13-2016, 08:44 AM
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1095-C
https://www.irs.gov/pub/irs-prior/f1095c--2015.pdf
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Old 10-13-2016, 10:32 AM
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Not advocating avoiding paying fines/penalties you owe but I'm pretty sure they do not have a system currently in place to match the 1095 forms to tax returns. I have insurance but I would not pay the fine if I didn't.
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