Tax preparers may play a key role in getting many uninsured individuals covered during the final weeks before the health insurance exchange enrollment deadline as most of the uninsured who file tax returns use in-person professional preparers, including two-thirds of those who claim the earned income tax credit (EITC).
Tax preparers can assist individuals with determining if they qualify for subsidies and estimating the cost of their plan premiums. Some tax preparers are linking with insurance brokers, such as H&R Block with GoHealth and Jackson Hewitt with GetInsured, so their clients can compare and shop for health plans and fill out applications on HealthCare.gov.
About 78 percent of returns that claim earned income tax credits are filed before March 31, the deadline for open enrollment for exchange health plans, according to research from the Urban Institute.
More than 74 percent of the uninsured who qualify for Medicaid or exchange subsidies file federal income tax returns, the report said. And 90 percent of young adults under age 35 who qualify for exchange subsidies file tax returns. Among all uninsured who file income tax returns, 43 percent are young adults.
Uninsured tax filers who are eligible for exchange subsidies are a younger group than the consumers who enrolled earlier. So enrollment strategies that are effective in reaching tax filers could end up supporting a more balanced risk pool.
"Since the majority of eligible filers use a tax preparer and file before March 31, this could be an effective route to boost enrollment," said Kathy Hempstead, who leads coverage issues at the Robert Wood Johnson Foundation, which funded the research, in a news release. The enrollment deadline comes just two weeks ahead of the April 15 deadline for filing tax returns.
The tax filing season is "the ideal moment" to help get customers enrolled in health insurance, said Brian Haile, senior vice president for health care policy at Jackson Hewitt Tax Service, in a release. After all, what people qualify for under the Affordable Care Act depends on their income and family size.
Tax software vendors, such as Intuit's TurboTax, also can offer tools that let taxpayers complete a paper application for insurance subsidies by answering a few questions beyond those needed to a file a tax return.
If that effort included vendors that participate in the IRS "Free File" program, taxpayers with incomes low enough to use that program – adjusted gross income of $58,000 or less in 2013 – could simultaneously file tax returns and apply for subsidized health coverage without paying a fee, the report said. Tax preparers also could more easily file insurance subsidy applications with the software specifying the questions they need to complete the forms for their clients.