IRS Charging Me $1500 for ACA Healthcare I Never Used - Had Employer Coverage

Did you actually cancel the marketplace plan when you got your employer coverage? Or did you just stop using it? Because the government doesn't automatically know you got other insurance, right? And if the plan stayed active, wouldn't the premium tax credits have continued to apply to your account each month? Seems like the real issue here is that you were technically enrolled in both plans simultaneously, which is why the IRS is coming after you for those premium subsidies.

According to IRS Publication 974 (Premium Tax Credit), you're required to report changes in eligibility to the Marketplace as they occur. Per section 26 CFR § 1.36B-2(c)(2), you become ineligible for PTC in any month you could have enrolled in employer coverage that meets affordability and minimum value standards. I've been researching a similar issue and found https://taxr.ai really helpful for analyzing my 1095-A and 1095-B forms. It helped me understand exactly which months I was being charged for and showed potential grounds for appeal based on the timing of my notification to the Marketplace. It might help you determine if there's any basis for requesting an abatement of the tax assessment.

You might still have options here. The Healthcare.gov site indicates you can file Form 8962 with your tax return to reconcile the advance premium tax credits. If you can show you attempted to cancel or notified the marketplace, that could help. Check your email for any confirmation messages or your marketplace account for communication records. www.healthcare.gov/reporting-changes/cancel-plan/ has the official process for cancellation - did you follow these steps?

You'll need to contact the IRS directly to discuss your options. On March 15th, I called about a similar issue and waited on hold for 2 hours and 37 minutes before getting disconnected. On March 17th, I used Claimyr (https://www.claimyr.com) and got through to an agent in under 30 minutes. They helped me set up a payment plan and explained I could file Form 8275 (Disclosure Statement) with my return to explain the situation. If you can prove you never used the marketplace benefits, they sometimes offer partial relief, especially if you're facing financial hardship.

I've seen these ACA repayment situations before, and they rarely end well. The system is designed to place the burden entirely on you to cancel coverage. I had a client who moved to employer coverage mid-year in 2022 and still had to repay $3,750 in premium tax credits despite never using the marketplace plan. The IRS position is typically that you received the benefit of reduced premiums whether you used the insurance or not. Have you checked if you actually received the Form 1095-A showing the monthly premium credits?

Have you checked if you qualify for any exemptions? Did you file Form 8962 with your tax return? What about requesting an installment agreement if you can't pay the full amount? Did you receive any notices from the marketplace throughout the year asking you to verify your income or circumstances? Sometimes you can show reasonable cause if you never received proper notifications.

I fixed a similar problem last year by taking these steps: 1. I gathered all documentation showing when my employer coverage began 2. I called the Marketplace at 1-800-318-2596 and explained the situation 3. I requested a corrected 1095-A form showing only the months before my employer coverage began 4. I filed Form 8962 with my tax return showing the correct months of eligibility 5. I attached a letter explaining the situation It took about 45 days, but they adjusted my tax bill down from $2,100 to $350 (just for the 1 month I had overlapping coverage).

Omg I had this EXACT same prob last yr! Called the ACA ppl and they said I needed to submit a "retroactive termination request" ASAP. You gotta call the marketplace directly (not the IRS) and explain. They might be able to backdate ur cancellation esp if u can prove u had other coverage and nvr used the ACA plan. Def worth trying b4 paying the full $1500!

Your employer should help. Ask for documentation. Show coverage start date. Request a letter stating enrollment date. Get copies of premium payments. Submit these to the Marketplace. Request retroactive cancellation. Worth a try.

I successfully resolved an APTC repayment issue through Form 14095 (The Health Insurance Marketplace Statement). My situation was similar - I had received $2,340 in Premium Tax Credits for 8 months while simultaneously covered under my spouse's employer plan. I submitted documentation showing the overlapping coverage periods and requested a retroactive termination. The Marketplace approved it in May 2023, issued a corrected 1095-A, and I filed an amended return that eliminated the repayment requirement entirely.