Under the health care reform law, Massachusetts residents age 18 and over are required to have health insurance, if it is affordable to them. In Tax Year 2007, taxpayers must show proof of insurance as of December 31, 2007 on their income tax returns. Taxpayers who can afford health insurance but lack coverage lose the benefit of their personal exemption (valued at $219 for an individual).
In order to verify whether individuals have health insurance, DOR created a new Schedule HC for taxpayers to complete. To assist taxpayers with private insurance (purchased either on their own or obtained through an employer) in filling out Schedule HC, insurance carriers and certain employers were required to issue a Form MA 1099-HC to every policyholder containing the requisite information needed to complete the Schedule HC. Every issuer was also required to send an electronic report to DOR with the same information provided to the taxpayer for verification purposes.
Any individual insured by MassHealth or Commonwealth Care did not receive a Form MA 1099-HC. These taxpayers are instructed to check the appropriate box on the Schedule HC to indicate coverage under MassHealth or Commonwealth Care. DOR will verify this information using an enrollment file provided by MassHealth and the Connector.
Preliminary Results for Tax Year 2007
The following DOR preliminary data highlights actual data on reported compliance with the individual mandate for Tax Year 2007. The data represents approximately 86% of the tax returns expected to be filed for Tax Year 2007. It does not include the estimated 450,000 returns that have yet to be processed or those expected through October from taxpayers who requested tax filing extensions. Nor does it reflect the health insurance status of certain individuals who are not required to file a tax return in Massachusetts (such as those with income below the filing threshold), or individuals who evade filing requirements.
Furthermore, the data in this document is based on self-reported information provided by the taxpayer on the Schedule HC and has not yet been verified by DOR. Taxpayers who misreported health insurance information may subsequently amend their filings, and when the post-filing verification process occurs later in the year, the numbers in this document could change if the reported coverage cannot be substantiated. The verification process includes the following: matches of Schedule HC data against the insurance information provided by insurance carriers and employers as well as the enrollment files of MassHealth and Commonwealth Care; consultation with the Division of Health Care Finance and Policy to ensure that those with religious exemptions did not receive health services funded by the Health Safety Net Trust Fund; and the application of auditing procedures with respect to taxpayer claims that insurance was not affordable.
Source: By Massachusetts Department of Revenues
Today the Mass. DOR also reported that most individuals in Massachusetts have health insurance, this means that 95 percent of the residents of Massachusetts consider the health insurance affordable for them. Only 5 percent has not considered it affordable.
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