HOW THE AFFORDABLE CARE ACT WILL AFFECT INDIVIDUALS AND THEIR TAX RETURN?

Open Enrollment for 2017 Health Insurance Coverage

The open enrollment period for obtaining or renewing health insurance plans purchased through the federal or a state Marketplace for 2017 will begin on November 1, 2016 and end on January 31, 2017.

Health Coverage Exemptions

Individuals who do not have health insurance for all or part of 2016 may qualify for an exemption from the requirement to have health insurance. If they receive an exemption, they will not be subject to the individual shared responsibility payment (penalty).
How you apply for an exemption depends on the type of exemption. A few exemptions must be applied for through the Marketplace via healthcare.gov. However, most exemptions may be requested when the 2016 federal return is filed.
Regardless of which type of exemption an individual receives or is requesting, they must complete Form 8965 (Health Coverage Exemptions) and include it with their 2016 federal return. If an exemption is granted by a Marketplace an Exemption Certificate Number is issued and must be included on Form 8965, Part I.

What to do if a Taxpayer’s Circumstances Change during 2016

If an individual received an advance premium tax credit (subsidy) to help pay for their 2016 health insurance through the federal or a state marketplace, it is important to remember that it was based on their income from a prior year. In order to ensure that the advance payments closely match the premium tax credit amount that will be calculated on their 2016 federal return, the taxpayer needs to report any significant changes in their income or any change to their family size to the Marketplace if it occurs during 2016. This will allow the marketplace to adjust the subsidy amount in order for the individual to avoid having to pay some of it back when they file their 2016 federal income tax return in 2017.