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800,000 affected by HealthCare.gov tax snafu: What you need to know

The Obama administration made two announcements Friday regarding health insurance coverage under Obamacare -- one involving some 800,000 inaccurate tax forms sent to people who purchased health insurance through HealthCare.gov -- and another that could benefit people who have not yet enrolled for health insurance.

What announcements were made today?

About 800,000 people who purchased health insurance through HealthCare.gov received incorrect tax information, Obama administration officials said Friday. The problem could delay filing of tax returns for those affected.

Separately, the federal government announced that people living in states that use the federal HealthCare.gov online marketplace who are eligible for coverage under the Affordable Care Act but who have not yet signed up will have an opportunity to do so from March 15 to April 30.

What erroneous information was sent?

The problem involves the 1095-A forms that healthcare exchanges must send to individuals and families showing how much money they got in 2014 from the federal government to subsidize their health insurance premiums. The forms have information needed to fill out the recipient's 2014 federal income tax return.

About 5.4 million people signed up for health coverage through the federal government's HealthCare.gov site for at least part of 2014. Nearly 9 out of 10 of them received subsidies to help pay their premiums. The subsidies are paid directly to the insurer to offset what the customer would otherwise have to pay as a premium. The level of subsidies is tied to each person's income.

The government sends a form to each person who received a subsidy showing how much they got. Approximately 800,000 of those forms -- close to 1 in 5 -- have an error and have to be redone.

How did the tax glitch happen?

Federal officials aren't sure, but Andy Slavitt, the official who runs the operations of the HealthCare.gov site, told reporters the problem had to do with the erroneous calculation of a "benchmark" premium used to help determine the amount of subsidies individuals receive.

"We're still investigating the cause," Slavitt said.

A similar problem affecting about 100,000 customers of Covered California was announced last week. Covered California, the state's Obamacare exchange, said it sent incorrect information on some forms because its customer data didn't match what health plans had on file. For example, there may have been a discrepancy for the person's length of coverage in 2014 and amount of subsidy received.

Covered California said the agency is sending revised forms to affected customers by later this month.

What do I do if I'm one of the 800,000 affected?

The government plans to send new, correct forms, and people should receive them in early March. The government is advising those people who got subsidies through HealthCare.gov to hold off on filing their taxes until they receive the corrected form.

Although many people don't file taxes until close to the last minute, the government estimates that about 50,000 early birds nationwide already have filed based on the incorrect information and will have to do their taxes over again.

Why is there now a special enrollment period?

The reason for the special enrollment period is that some people will discover only when they fill out their taxes that they owe a penalty as a result of not having health coverage in 2014. Rather than penalize those people again for 2015, the administration said they want to give them an opportunity to sign up for coverage under Obamacare, joining the 11.4 million nationwide who have already done so.

Slavitt said the special enrollment period is a one-time provision that will not be repeated in future years.

What does the special enrollment period mean for me?

If you don't have insurance and you live in a state that uses the federal insurance market, you have another chance to enroll in health insurance coverage for 2015. Several million households could benefit from that grace period. If people do not purchase coverage for 2015 during this period, they may have to pay a fine when they file their 2015 income taxes.

Covered California announced a similar additional period for California residents last week.

When will open enrollment begin for Obamacare coverage?

The administration announced Friday that open enrollment for Obamacare coverage for next year will take place from Nov. 1, 2015 to Jan. 1, 2016. The length of the enrollment period is the same as it was this year.


Los Angeles Times staff writer Chad Terhune contributed to this report.

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