MNsure users still waiting for tax forms

MNsure still hasn't sent required tax forms to thousands of people who bought private coverage through the health insurance exchange last year.

Officials had hoped all documents would be in the mail by mid-March, but that's not going to happen, said Allison O'Toole, the MNsure chief executive, during a MNsure board meeting Wednesday in St. Paul.

So far, the exchange has mailed about 29,000 forms out of an estimated 47,000 that must be sent. Taxpayers need the paperwork to reconcile government tax credits that discounted premium costs for 2015.

"We have a significant batch of forms that are in-process as we speak," O'Toole told board members. But she added: "We will not have 100 percent of the forms sent out before March 15."

The IRS said forms were due Feb. 1. After missing the deadline, MNsure has repeatedly pushed back its own projections for when all documents might be delivered.

The exchange has had problems with a new automated process for creating the forms, and has waited on delivering some forms to guarantee accuracy. The deadline for filing taxes is April 18.

"I do have confidence that consumers will have their forms before the deadline," O'Toole told board members.

During Wednesday's meeting, board member Phil Norrgard expressed frustration with the delays, and asked whether MNsure was slow to jump to contingency plans. Norrgard has served on the MNsure board since its troubled rollout in 2013, and said if he wrote a book on the experience he might call it "The Zen of Exasperation."

"Where is the accountability," Norrgard asked, "when we get to this point where we just can't do what we said we were going to do, and when we know we have to?"

IRS has guidance on its website for people seeking the forms — called 1095-A — but the primary advice is for taxpayers to contact the exchange. Apparently, lots of customers have been doing just that, since questions about the forms accounted for nearly 13 percent of all calls to MNsure's call center between Feb. 15 and March 6.

Minnesota is one of more than a dozen states to launch its own health insurance exchange, also called a "marketplace," to implement the federal Affordable Care Act.

"A taxpayer's recourse is to contact the Marketplace, wait, and if necessary file for an automatic extension (Form 4868) for 6 months," an IRS spokeswoman wrote in an e-mail.

Jumping from the automated process to a backup contingency plan for creating the forms has trade-offs, said Scott Peterson of MN.IT, the state's IT department. The issue is not simply generating a form for individual MNsure users, Peterson said, but also delivering the information to IRS.

"It's harder and harder, as you move further and further down the road, if you drop to contingency," Peterson said during the board meeting. The complexity involves reconciling data between MNsure and health insurers, he said.

O'Toole said that of all forms issued thus far, MNsure has had to correct fewer than 100 documents — an error rate of less than 1 percent. Last year, MNsure had an error rate of less than 3 percent with the forms, which was far lower than the rate with the federal government's healthcare.gov exchange.

"We are trying to work as quickly as we can, and as accurately as we can — that is ultimately better for Minnesotans, to get an accurate form," O'Toole said in an interview following the meeting.

In other business Wednesday, the MNsure board adopted a new preliminary budget plan with lower enrollment projections for this year and next.

Officials said the reductions fit with a state report presented last month showing the uninsured rate in Minnesota has dipped to about 4 percent, which means fewer potential customers.

"There's not as much room to run," said board member Tom Forsythe. "It is prudent to have this be the enrollment forecast going forward."

Going forward, MNsure expects enrollment growth of 15,000 people in 2017, down from a previous growth projection of 30,000 people. Even with lower enrollment, the MNsure budget remains balanced, Forsythe said.

Despite signing up more than 85,000 people for private health insurance this year, MNsure no longer expects to meet its current budget target of 83,000 people with coverage by the end of this year. Now, the exchange expects that fewer than 71,000 people will have coverage through MNsure as of Dec. 31.

That particular decline stems from the significant falloff at most government-run exchanges between sign-up tallies and final enrollment numbers, since many people don't complete the process of buying coverage. In some cases, people drop coverage during the year.

Minnesota launched the MNsure exchange to implement the federal health law, which requires almost all Americans to have health insurance or pay a tax penalty.

Christopher Snowbeck • 612-673-4744

Twitter: @chrissnowbeck