Q: Colorado health insurance question
In 2016 I had a mix of ACA, employee, and Medicaid health insurance. As I was unemployed at the end of 2015 I had signed up for Medicaid. From that point on we received conflicting mail from the state saying it as on, off, etc - never clear. Thinking it was off at the time I started a new job in February, I signed up for 3 months of the ACA because there was a 90 day gap. These 3 months qualified for huge tax credits because the state didn't know I started the job. In filing taxes for the year these credits were discovered, and a refund turned into a large bill. I verified with the state that for the entire year I WAS on Medicaid; if I had known that I wouldn't have signed up for anything else. My 1095A shows these credits for the ACA, while the 1095B shows Medicaid. I called the IRS, they said to call the state - the state said to call the IRS. Is there a way to make the 1095A void because of the mix up? One would think the B would trump the other but to the IRS, it doesn't matter.
Based on your facts, the two 1095s show that you were doubly insured (which you now already know). The IRS does not consider insurance options--they only compute the penalties. Colorado will likely demur because you acted on your own behalf (even if based on confusion). As a result, the dual insurance will likely stand.
You can appeal the determination with the IRS, but you will need to contact (and pay for) a tax attorney's assessment. There may be grounds for an abatement of the tax, but a lot more information is needed before an assessment can be made.
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