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Tips on Using Your New Marketplace Coverage

Hospital waiting room, Tips on Using Your New Marketplace Coverage

Dennis Hallinan/Alamy

Learn how to get discounted health services without sacrificing quality of care.

Most taxpayers will have to check just one box on their 2014 federal income tax returns to show they had health insurance coverage throughout the year. Others may need to take a few more steps.

Had Health Insurance for All of 2014

Most people who had job-based coverage, Medicare or Medicaid or who purchased insurance on their own in 2014 will check the box on IRS Form 1040. To check to make sure your coverage meets the requirements to have health insurance, visit

Had No Health Insurance for Some or All of 2014

Tip --> You’ll need IRS Form 8965.

You may have to pay a penalty (a fee) if you didn’t have health insurance for some or all of 2014. The penalty this year is $95 or 1 percent of your income above $10,150 ($20,300 for couples filing jointly)—whichever is higher—but in no case will you pay more than what it would cost to buy a bronze plan in the Health Insurance Marketplace. Complete IRS Form 8965 to find out:

  • Whether you need to pay the penalty
  • How much the penalty will be if you need to pay it

Bought Health Insurance in the Marketplace

Tip --> You’ll need IRS Form 8962

The Health Insurance Marketplace should have sent you Form 1095-A; if you don’t have it, contact the marketplace in your state. Form 1095-A will tell you whether you received a premium tax credit and whether it was paid directly to the health insurance plan. You’ll use this information to fill out IRS Form 8962.  

  • If your income was higher in 2014 than you originally estimated—then you may have to pay some or all of the tax credit back to the IRS.
  • If your income was lower in 2014 than you originally estimated—then you may get a tax refund.

To find the closest AARP Tax Aide site for free help preparing your 2014 taxes, go to For more information about your health coverage and federal taxes, go to

W-2 Reporting

You may notice on your W-2 form that your employer has reported the cost of your group health insurance benefits. This reporting will not affect the taxes you pay. The value of any health insurance benefits reported on your W-2 should not be included in your income when you file your taxes.

Prepare for 2015 Now

  • If you have subsidized coverage through the Health Insurance Marketplace, report life changes—such as getting a raise, moving or a death in the family—when they happen to reduce the chance you’ll have to pay back money at tax time.
  • Act now and sign up for coverage by Feb. 15 to make sure you don’t have a gap in coverage of three months or more.
  • Be aware the penalty (fee) for not having health coverage goes up. Depending on their circumstances, some people will not have to pay a penalty for not having health coverage —this is called an exemption. You don’t have to wait until tax time to see if you qualify. See the full list of exemptions at