Forty Percent of ACA Subsidized Households Could Lose Eligibility Because of Tax Filing Confusion - Insights

Sep 19, 2026

Preliminary IRS data indicates that about 40% of households receiving Affordable Care Act (ACA) subsidies in 2014 face risk of losing eligibility due to complications in their 2014 tax filings. The IRS letter to Congress reports 1.8 million heads of households have not submitted required ACA-related tax forms to reconcile roughly $5.5 billion in subsidies. Missing filings fall into three groups, including extensions, incomplete form attachments involving IRS Form 8962, and households that filed no paperwork.

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Key Findings

IRS Letter and Eligibility Risk

Three Categories of Missing Filings

Policy Context and Complexity

Insight Forty Percent of ACA Subsidized Households Could Lose Eligibility Because of Tax Filing Confusion BRITTANY LA COUTURE | AUGUST 19, 2015 According to preliminary data released by the Internal Revenue Service (IRS) in a letter to Congress on July 17, 2015, about 40 percent of households that received subsidies in 2014 are currently at risk of losing their subsidy eligibility because of complications with their 2014 tax returns. To date 1.8 million heads of households have not submitted the appropriate Affordable Care Act (ACA) related tax forms to reconcile the $5.5 billion in subsidies paid on behalf of these households. Those who have not yet filed the appropriate forms belong to one of three groups. First, about 360,000 taxpayers who received subsidies have filed for extensions, and therefore have until October 15th (two weeks before the start of 2016 open enrollment) to file. Second, about 760,000 taxpayers did file their personal income tax returns (form 1095A or similar), but failed to attach a second, new Premium Tax Credit form 8962 (which happens to look very similar to form 1095A) . Form 8962 was introduced in 2014 as a means of reconciling subsidies paid out through the exchanges with the taxpayer’s estimated subsidy eligibility based on their 2012 income tax filings. This form is a necessary (if confusing) addition to the tax filing process, as preliminary data indicates that 90 percent of taxpayers incorrectly estimated their 2014 income. The third group of missing tax filings belongs to 710,000 taxpayers who did not file any tax paperwork whatsoever. This omission is to be expected in many cases, as low income individuals receiving subsidies may never have been required to file a return in years past. Confusion or lack of information about how, where, or when to file an income tax return and the new Premium Tax Credit form may have contributed to this error of omission. Nonetheless, this error endangers future subsidy eligibility for these 710,000 American AMERICANACTIONFORUM.ORG households. The legislative marriage of two of life’s most baffling necessities– taxes and health insurance–has naturally resulted in some confusion. Notably, nearly half of those purportedly helped by the ACA are now on the verge of losing those benefits– a testament to how complicated the law really is. AMERICANACTIONFORUM.ORG

FAQs

How many ACA-subsidized households are at risk of losing eligibility?

About 40% of households that received subsidies in 2014 are currently at risk.

What does the IRS report about missing ACA-related tax forms?

The IRS reports 1.8 million heads of households have not submitted the appropriate ACA-related forms to reconcile $5.5 billion in subsidies.

What are the three main groups behind the missing or incorrect tax filings?

One group filed extensions; a second filed tax returns but failed to attach Form 8962; the third filed no tax paperwork at all.

Sep 19, 2026

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