Inadvertently dropped from health exchange

[David]

Client had health coverage through the exchange and was inadvertently dropped by the insurer in Jan 15. Client says it was a glitch on the exchange. Premiums were auto debited and they did not know they had no coverage until April. They got short term coverage for May and June and then back on the exchange in July. 

They receive a 1095-B from the exchange showing coverage from July - Dec.

Since the lack of coverage was no fault of the TPs what can be done to not penalize them? I would like to check the box that says they had coverage all year. But I guess I have to take the time to see if an exemption is available?

I would think the exchange would have issued an exemption.

Any problem in simply checking the box that they had coverage all year?

 

[ILLMAS]

What happened to your client is so common, I had another client apply, they sent him his insurance card, received a letter stating they hadn't received his payment, sent another payment, a couple of months later same letter, ACA peeps told him they would resolve it, weeks later they drop him   Who's fault was it?

[Catherine]

I have a similar case; clients had coverage, state dropped the ball.  Kept asking for proof of income and proof of residence which were supplied multiple times.  They are getting a penalty that they should NOT have to pay as they had been working to resolve the issue for months before coverage was dropped.  State paperwork even states THEY were at fault, not clients!

So what *is* the solution here:  mark them as having coverage, and use the state letter as proof it was NOT their fault?

[Jack from Ohio]

This is not a tax issue.  This is an insurance issue.  When this arises, I do not get involved at all.  The insurance law is what you are asking to get an exemption from.  NOT a TAX LAW.  I refuse to be dragged into that world.  I did not pass the laws, and I am NOT AN INSURANCE PROFESSIONAL.

I want to make sure my clients know these things.

[easytax]

May sound callous  BUT   tax question is were they covered ------ regardless of WHY ---- answer is NO.    They need to fix and possibly get documents from INSURANCE side and then maybe discuss with tax people.     Until then, the answer is NOT COVERED --- so do not lie and say "all year" coverage  because the insurance people -- messed up   - that was NOT the question ------ ARE, were you covered was the question  ----- client needs to fix with INSURANCE people before tax can be anything else.

 

[grmy2h]

I think in those situations I would file extension and try to get some sort of exemption. I would not say they had it if you know they did not.