The Kafkaesque nightmare started with two letters from the IRS, the only IRS letters I have ever received.
The first, from its Austin, Texas, office, dated March 14, stated: "The amounts you reported on Form 8962, Premium Tax Credit, Part II, columns (a) - enrollment premiums, (b) - applicable second lowest cost silver plan (SLCSP) premium or (f) advance payment of PTC, don't match the information we have on file from the Health Insurance Marketplace."
The second letter, from its Andover, Massachusetts, office, dated April 24, just about stopped my heart, as the title read, "We're auditing your 2016 Form 1040." It continued with: "We need you to send us information to support the Premium Tax Credit (PTC) claim on your tax return. We are holding all or part of your refund due to a discrepancy with your PTC pending the results of this audit. Be sure to respond within 30 days from the data of this notice or we'll disallow the PTC claim and you may owe additional tax."
In other words, not only would I lose the substantial tax credit for Obamacare, I would be hit with the penalty enacted against teabaggers who never obtain insurance.
I do not have a numbered bank account in Switzerland or the Cayman Islands. I am not in the inner circle of Donald Trump. I am not a Rick Santelli groupie, so I had medical insurance for the entire year. In other words, there was no valid reason for auditing me.
Connect for Health Colorado (CfHC), the health insurance marketplace for Colorado, was the culprit, though I would blame the IRS until the conclusion of my ordeal.
In late January, I received a 1095-A by mail, but around the same time I received an email explaining that the 1095-A was in error. I was advised to wait until a corrected one arrived. The email was addressed to someone else, with the name not being close alphabetically. Everyone else I know who received medical insurance through CfHC told me that they also received an email addressed to the wrong party. Technically this was a HIPAA violation, but that law has always been a joke.
In early February, I received a corrected 1095-A. I verified that its CORRECTED box was checked, the per month amount was XY-something (my payments had been XY-something), and the monthly amounts were all the same. I e-filed on February 21 using the second one.
I had never seen an incorrect tax form from an employer or company, so I assumed that this one was okay too. Big mistake.
Then I received the aforementioned first IRS letter. Naturally I sent copies of my 1095-A and 8962 to their Austin office. I called a couple of times, each time being told that my taxes were in process, requiring eight weeks for completion.
I contacted CfHC and was assured that my 1095-A had been submitted by January 31, 2017, as required by law. A few days later the CfHC agent emailed, asking to close the ticket.
I finally looked very carefully at the corrected 1095-A I had received, verifying every single data field. The amount that I had paid every month did not match the amount listed on the 1095-A, with the amounts being, respectively, $XY6.76 and $XY3.64, with the difference being $3.12.
I contacted CfHC many times. I used Twitter and even emailed the CEO, Kevin Patterson, whose predecessor, Patty Fontaneau, personally retained money for grants intended to purchase equipment, with the U.S. Department of Health and Human Services Office of Inspector General finding that CfHC had "a lack of adequate stewardship of Federal funds." Patterson previously served as chief administrative officer to Governor Hickenlooper, who is only interested in pardoning armed robbers. All I ever received was the usual soothing customer service hokum.
A manager named Lori called and spent minutes saying absolutely nothing. The only thing I remember from the conversation is that she said, "Thanks for not yelling at me." I received an email informing me that the trouble ticket had been closed.
Then I received the second IRS letter and went ballistic. I mailed yet more forms to them, this time via certified mail to their Andover office, including copies of the checks I used to pay the monthly premiums. I emailed the CfHC board and demanded action.
Walter, who works for Lori, called me on May 15 and tried to give me more soothing talk. However, he said some things which completely changed my perspective. He said in an off-hand manner that my corrected 1095-A had not been transmitted before January 31. He believed that it had actually been transmitted in March which would explain the IRS letters.
Walter also said something which struck me as complete rubbish, that 1095-As are not required to be exact, that they have a tolerance, so the $3.12 difference was not important.
I sent one last request to the board for a copy of the 1095-A which had been filed after the January 31 deadline, but no one ever responded.
I tried to call the IRS via the number included on the second letter, but every time I gave up after being on hold for almost two hours. Then I realized that I had been able to call them with only a 5-10 minute hold via the number included on the first letter. I would not be able to ask detailed questions regarding the audit, but I would be able to ask questions regarding paperwork. I called on May 18 and asked a few specific questions:
- I asked for the dates on which the IRS had received a 1095-A transmission. The agent informed me that the IRS had received two transmissions: January 30 and May 10.
- I asked whether there was any penalty for health insurance marketplaces not transmitting a 1095-A by January 31. She told me that they are required to transmit the data by that date, but she was unaware of any penalty for not doing so.
- I asked about Walter's assertion that 1095-As have a tolerance. She admitted that she had never heard of such a thing, that IRS forms are always supposed to be accurate.
And she told me that the audit had been closed on May 16.
I haven't yet received a letter from the IRS, but Danielle Henry of Congressman Jared Polis' office informed me that my refund would be deposited into my checking account on June 1. And it was. I seriously doubt if CfHC would reimburse me for my USPS Certified Mail expenses, so I won't even ask.
So for those unlucky enough to depend upon CfHC:
- You have no idea what CfHC reports to the IRS and you cannot force anyone there to divulge that information.
- Do not trust any mailing or email CfHC sends. Verify every data field, and if any are incorrect, demand a new one.
- Don't e-file. Mail copies of your 1095-A and payment receipts with your tax return so the IRS can reconcile CfHC's errors.
Because CfHC will not change due to the CEO being a friend of Hickenlooper.