This tax season, some Americans are finding their returns rejected due to Affordable Care Act (ACA) coverage they never knew they had. This issue often traces back to unauthorized enrollments, where brokers sign up unsuspecting individuals for ACA plans, sometimes by exploiting online enrollment portals linked to healthcare.gov. While unauthorized enrollments have been a concern for years, the issue is worsening, according to Erin Kinard from Pisgah Legal Services, which assists low-income families with ACA enrollment and tax preparation. Such cases have surged recently, with complaints rising as people discover unexpected ACA policies in their name, leading to tax complications and financial burdens.
These unauthorized enrollments create confusion at tax time. If the IRS identifies ACA coverage without the necessary forms, returns are rejected, and filers may be liable for premium tax credits that were improperly applied due to misinformation—sometimes caused by the brokers who signed them up. For instance, Ashley Zukoski, an ultrasound technologist in North Carolina, was unknowingly enrolled in an ACA plan by a Florida broker. Her employer-based health coverage was disregarded, resulting in a nearly $700 tax bill instead of a $4,100 refund. When Zukoski sought to have her Form 1095-A, which reports ACA coverage, voided, her request was denied due to a pharmacy charge under the ACA plan, leaving her to file a tax extension.
Experts advise anyone who suspects unauthorized ACA enrollment to report it quickly to the federal or state ACA marketplace, request a corrected 1095-A form, and consider filing an extension. Victims can also contact state regulators or enlist help from ACA “navigators” who assist with insurance issues and submit complaints to federal authorities. With the April tax deadline looming, experts recommend paying any taxes due to avoid penalties, while affected consumers await potential resolutions from authorities.
