Transcript www.urban.org

Tax Preparers and Reaching
the Eligible Uninsured
Stan Dorn, Senior Fellow
The Urban Institute
[email protected]
202.261.5561
Council for Electronic Revenue Communication
Advancement
May 21, 2014
URBAN INSTITUTE
1
s
Overview
I. Potential impact of tax preparers reaching
the eligible uninsured
II. Timing
III. A voluntary covenant
URBAN INSTITUTE
2
I.
POTENTIAL IMPACT OF TAX
PREPARERS ON REACHING
THE ELIGIBLE UNINSURED
URBAN INSTITUTE
3
Federal income tax filers, as a percentage of
the uninsured who qualify for health coverage
88%
9.7 million
70%
2.3 million
72%
74%
3.1 million
18.9 million
53%
3.8 million
Medicaid
Medicaid parents Medicaid/CHIP QHP subsidies ALL ELIGIBLE
childless adults
children
UNINSURED
Source: Dorn, Buettgens, Dev, 2014 (HIPSM-ACS).
Notes: Estimates understate the prevalence of federal income tax filing as compared to administrative data.
URBAN INSTITUTE
4
Federal Income Tax Filing among the Uninsured
Who Qualify for QHP Subsidies, by Age
94%
0.4 million
0–18
91%
90%
84%
4.2 million
2.0 million
19–34
35–44
Source: Dorn, Buettgens, Dev, 2014 (HIPSM-ACS).
Notes: Estimates understate the prevalence of federal income tax filing as compared to administrative data.
URBAN INSTITUTE
5
3.1 million
45–64
Tax Preparation Method, by
Adjusted Gross Income, 2008
Tax preparation method
AGI
Under
$30,000
$30,001$50,000
$50,001$100,000
>$100K
Total:
Total
No
returns identified
(millions) preparer
Paid
preparer
IRSprepared
return
Tax
Volunteer
counseling
income tax
for the
assistance
elderly
67.9
40.9%
55.8%
0.3%
1.5%
1.6%
25.4
41.7%
56.7%
0.1%
0.8%
0.8%
31.0
40.0%
59.1%
0.0%
0.3%
0.5%
18.3
142.6
35.4%
40.1%
64.4%
57.8%
0.0%
0.1%
0.1%
0.9%
0.1%
1.0%
Source: Dorn, Buettgens, Dev, 2014. Urban Institute Tax Policy Center analysis of IRS 2008 Statistics of Income.
URBAN INSTITUTE
6
Health program eligibility among
various groups of EITC-eligible people
(assuming Medicaid expansion)
Medicaid/CHIP
100%
Marketplace subsidies
1%
75%
11%
7%
73%
79%
Childless adults
TOTAL
12%
50%
95%
60%
25%
0%
Children
Parents
Source: Dorn, Isaacs, et al. 2013 (TRIM3, HIPSM 2012).
Notes: Assumes that all states expand Medicaid eligibility for adults to 138 percent FPL.
URBAN INSTITUTE
7
Other benefits of engaging tax
preparers
• Help completing paperwork
• Leveraging the penalty for uninsurance at its
moment of maximum persuasive power
– When it is being enforced to take away a refund
• Lowering monthly premiums
– Average tax refund in the $20,000-$50,000 AGI range
exceeeds $2,700 per return
– If some or all of the refund could be directed to pay annual
QHP premiums, more affordable coverage
• Addressing tax reconciliation
URBAN INSTITUTE
8
s
II.
TIMING
URBAN INSTITUTE
9
Open enrollment 2015
• November 15, 2014
through February 15, 2015
– Previous proposed period ended
on 1/15/15
• Modest overlap with tax filing
season possible
• Families USA proposal
– Special enrollment through 4/15/15
– If uninsured taxpayer pays penalty for
going without coverage in 2014, brief
opportunity to enroll into QHP for 2015
URBAN INSTITUTE
10
Open enrollment 2016 and
beyond
• HHS has now officially suspended judgment
– Earlier proposal: 7 week open enrollment period,
mid-October through early December
• Alternative calendar
– Open enrollment, 7 weeks ending on 3/31
– Plan year starting on 5/1, ending 4/30
URBAN INSTITUTE
11
Pros and cons of alternative calendar
Advantages
• Can use tax preparers
• QHPs seem more affordable in tax
refund season than holiday season
• Carrier staff and brokers more
available when no overlap with ESI
& Medicare open enrollment
• Less burden of employer
verification. EINs allow verification
by data match.
• Avoids perceived unfairness of
forcing people to remain uninsured
and pay penalty
URBAN INSTITUTE
12
Disadvantages
• More complex tax
reconciliation
• Need for transitional
QHP plan year
• Some workers leave
ESI for QHPs mid-year,
rather than in January
III.
A VOLUNTARY COVENANT
URBAN INSTITUTE
13
Issues
• Challenges facing tax
preparers
– Not much cooperation from
federal and state
policymakers
• Concerns from a number of
consumer groups about
past activities of some
unscrupulous for-profit tax
preparers
URBAN INSTITUTE
14
Voluntary covenant concept
• Policymakers offer tax preparers assistance they
need to efficiently and sustainably help numerous
uninsured clients receive health coverage
• To qualify for that assistance, tax preparers can, if
they wish, choose to live up to a “gold seal” code
of conduct promulgated by leading health
consumer groups
URBAN INSTITUTE
15
What assistance could best help tax preparers
enroll numerous uninsured clients?
• Favorable publicity from, e.g., the Governor
• “Back-end” data base forms that preparers could
populate with client data, eliminating the need to
use websites to enroll clients into coverage
• Guaranteed acceptance of specific application
forms
• Funding for successful Medicaid applications
• What else?
URBAN INSTITUTE
16
Possible gold seal requirements
1.
2.
3.
4.
5.
Discounted tax preparation services for low-income
clients during open enrollment
Competent tax preparation (e.g., fulfilling continuing
education requirements)
Competent assistance with all health subsidy
programs, either directly or through a contractual
partner
No loans for health insurance premiums (but can have
full or partial refunds directed to help pay QHP
premiums)
Either directly or through contractual partner—
a.
b.
c.
Certified navigators/assisters/brokers
No additional charge for health application
No preferential presentation of particular plans
URBAN INSTITUTE
17
Conclusion
• Most eligible uninsured are not yet enrolled
in coverage
• Tax preparers offer a remarkable chance to
reach the eligible uninsured
• Taking advantage of that opportunity will
require close collaboration between
policymakers, consumer groups, and the tax
preparer community
URBAN INSTITUTE
18
Information sources
•
•
Stan Dorn, Matthew Buettgens, Jay Dev. “Tax Preparers Could Help Most
Uninsured Get Covered.” Prepared by the Urban Institute for the Robert Wood
Johnson Foundation, Feb. 2014. http://www.urban.org/UploadedPDF/413029Tax-Preparers-Could-Help-Most-Uninsured-Get-Covered.pdf
Stan Dorn, Julia Isaacs, Sarah Minton, Erika Huber, Paul Johnson, Matthew
Buettgens, and Laura Wheaton. “Overlapping Eligibility and Enrollment:
Human Services and Health Programs Under the Affordable Care Act.”
Prepared by the Urban Institute for the Office of the Assistant Secretary for
Planning and Evaluation, U.S. Department of Health and Human Services,
Dec. 2013. http://www.urban.org/UploadedPDF/413028-OverlappingEligibility-and-Enrollment-Human-Services-and-Health-Programs-Under-theAffordable-Care-Act.pdf.
URBAN INSTITUTE
19