In the News: Health Insurance Companies are Requesting SSNs
October 13, 2015 : Teresa Shipley Feldhausen – Guest Contributor
Ed Note: The Affordable Care Act also means new paperwork for you and health care companies. Insurance providers are now required to tell the Federal government who’s enrolled in their health care plans. To do so, those companies may be asking for your Social Security Number. Here’s what you need to know.
Your health insurance company may have sent a letter asking you to provide your social security number, as well as the SSNs of anyone covered on your plan, like a spouse or children. Don’t worry – it’s most likely a legitimate request. As of 2015, health insurance companies have to report information about policyholders to the Federal government in order to comply with the Affordable Care Act (ACA).
How are they requesting SSNs?
Most insurance companies are sending a letter to ask for the information. However, there is no one standard. If you are suspicious of a request for your SSN, it would be good to contact your insurance company directly to make sure it’s legitimate.
Your health insurance company will use their information about your coverage and your SSN to create a form called the 1095-B or 1095-C. This is an official IRS document that the IRS will use to verify your coverage status when you complete your 2015 taxes. .
Why do I have to provide this information?
The information is necessary because the ACA requires everyone to be insured (unless you have an exemption) or pay a penalty for not having coverage. Beginning with your 2014 tax return you were asked to report your health insurance coverage information. But starting in 2015, IRS will have the ability to verify that you and everyone in your household actually had that coverage for the entire year. The ACA requires health insurance companies to report their enrollees’ coverage status on an information document that is sent to both the taxpayer and the IRS. Like all other tax documents, social security numbers are used as the taxpayer’s unique identifying number. Having the social security number allows the IRS to match the information you report on the tax return to the reporting document from your insurance company. This cross-check will confirm to the IRS that you had coverage or help determine if you need to pay a tax penalty.
Shouldn’t my health insurance company already have my SSN on file?
According to Aetna, one of the nation’s largest health care providers, many insurers have been phasing out the use of SSNs to identify members. Also, many health care plans don’t ask for SSNs for anyone you’ve added to your policy, like a spouse or dependent. Because of the new ACA requirements, health insurance providers are reaching out to plan members asking for that information if they don’t already have it, or if they need to validate the information they have on file.
Why is my insurance company asking for this information now?
It may seem early – most folks won’t prepare their 2015 taxes until January or later – but health insurance companies need time to make sure they’ve done their homework. If they fail to report correctly or on time to you or the IRS, they could face penalties. The 1095-B or 1095- C has to be mailed to you by January 31, 2016.
I don’t want to send my SSN though the mail. Do I have another option?
You are right to be cautious about sending your SSN through the mail, which can be lost or stolen. Many insurance companies have online portals where members can log in and enter secure information. Contact your health insurance company to find out how you can securely complete the SSN reporting requirement.
Reminder: take action on health insurance coverage now.
In addition to providing your SSN to your insurance provider, if requested, there are a few other health insurance “to dos” this fall.
If you don’t have health insurance coverage and don’t want to pay a penalty, look at options through a Marketplace. Open enrollment starts Nov. 1 and ends January 31, 2016. Enroll by December 15, 2015 to ensure your coverage begins on January 1, 2016. You may be eligible for Advanced Premium Tax Credits to help reduce the health insurance premium costs.
If you had Marketplace health insurance coverage and received the advance premium tax credit in 2014, but still haven’t filed your tax return, file it now. Otherwise, you could risk losing your Advance Premium Tax Credit for the 2016 plan year.
There are still several changes on the way when it comes to health insurance and taxes. For example, every taxpayer will be mailed a 1095 form this year. For any questions, or for more information, make an appointment with one of our tax professionals or visit our ACA website.