Health insurance brings Tax Day surprise for some

by State Representative Paul Anderson

Some Minnesotans who received a subsidy last year to help cover the cost of their health insurance may be in for a surprise when they file their tax return for 2014. At least one constituent reported to me that they must pay several hundred dollars of additional tax to cover the subsidy they received from the federal government to defray the cost of insurance. To be fair, this is not a problem brought on by the troubled MnSure exchange in Minnesota. It has to do with incomes that turned out to be underestimated, which resulted in subsidies received that were too large.

Back when folks signed up for health coverage and the associated subsidies for last year, 2013 incomes were used to determine the level of subsidy. However, if the actual income for 2014 increased by a certain level, it changed or eliminated the subsidy amount people were entitled to receive. That’s the reason why some will have to pay income tax on that subsidy, although they had no idea this might happen. And even if they knew, it would have been very difficult, if not impossible, to get back into the MnSure system to make a change in income, which would have also resulted in a lower subsidy and higher health insurance premiums.

In addition, an announcement late last week from Washington told of an error in sending out tax information to nearly one million Americans. It’s a new form called 1095-A, and it goes to all who received a subsidy to help with the cost of health insurance. This situation also serves as a strong message illustrating the new and complicated link between health care law and taxes. Nationally, it’s estimated the wrong information was sent out to one in five of those who received subsidies. The information represents a tax reporting error on the government’s part that will slow down the filing season, especially for those who file early in hopes of receiving a refund.

***

I attended the opening of a new exhibit on space flight at the Science Museum of Minnesota last Thursday evening in St. Paul. On hand to mark the occasion was Col. Mike Fossum, an astronaut who spent nearly six months aboard the International Space Station and has walked in space on seven separate occasions. He gave an excellent speech and then opened the floor to questions from the audience. One of the questions pertained to motivating today’s kids to get more involved in activities that might increase their interest in space exploration. I thought Col. Fossum’s answer was excellent when he said that kids should be “unplugged” from their video games and cell phones, and that they should spend more time outside, playing and looking up at the stars above them.

Representative Paul Anderson column

This was dated January 12...didn't have room in the Jan. 15 issue of the Bonanza Valley Voice:

Interesting topics quickly arise as 2015 session begins

By Rep. Paul Anderson

The new legislative session is underway! The ceremonial first day swearing-in was last Tuesday, with the House chamber packed full of family members and friends as 26 freshmen legislators took the oath of office along with returning members. It’s always a fun day with optimism about bi-partisanship running high.

It was just three days later, however, when Governor Dayton blasted the Republican House proposal for transportation funding over the next few years. The governor had outlined his plan, which calls for a 6.5-percent sales tax on gasoline, at the annual Chamber of Commerce dinnerWednesday evening. The proposal put forth by our caucus the next day contained a combination of using some of the projected budget surplus, along with reserve funds and money from the general fund, to pay for the state’s transportation needs over the next four years. This was a starting point; although the governor’s swift reaction was a bit surprising. Transportation funding will be a huge topic this year, one that will require compromise from all parties involved.

One interesting piece of news that floated about during those first days had to do with not having a legislative session at all next year because of the major remodeling project currently underway at the Capital. Approximately two-thirds of the building is off-limits now, with even more closures planned for next summer after this current session has ended. Both the Senate and House chambers are in use, although the rotunda and most other areas have been cordoned off. One of the casualties during the remodeling is the cancellation of school group tours. In past years, spring time especially has seen literally hundreds of school kids touring the Capital on any given day. However, that will not be happening for at least the next year.

The Senate has really been scrambling for space. They will only have access to three committee hearing rooms in the Capital, and many of their individual offices have been moved. In addition, once this session ends, their chamber will be closed down for remodeling work. The hope is that their new office building, currently under construction across the street from the Capital, will be completed by next January so they could have sessions there. The House chamber itself will still be usable next year; however, the staff working areas on both sides of the chamber will be off-limits. That raises the question of how all the bill and amendment processing would be done when the House is in floor session.

Those are some of the reasons the issue was raised. It’s my best guess, however, that we will have some kind of session next year, although it may be of a shorter duration. It would be difficult to finish work on the budget this year, and also get the bonding bill done. It will be interesting to see how all of these factors play out over the next two years!

Committee hearings got underway this week. I am serving as Chair of the House Agriculture Policy Committee, in addition to working with Ag Finance, Education Finance, and the Property Tax Division. It’s going to be an interesting year with Republicans in control of the House, while the DFL remains the majority party in the Senate. As always, I encourage your thoughts and input. My e-mail address is;rep.paul.anderson@house.mn and my phone number in St. Paul is 651-296-4317.