Littleton, CO asked in Tax Law and Health Care Law for Colorado

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.

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1 Lawyer Answer
Tristan Kenyon Schultz
Tristan Kenyon Schultz
  • Tax Law Lawyer
  • Fort Collins, CO
  • Licensed in Colorado

A: 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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