Jackson Hewitt is gearing up this tax season to offer its tax customers help with signing up for the Obamacare health insurance marketplaces, despite the technical problems that have plagued the new exchanges since they launched at the beginning of this month.
The tax prep chain announced the new program last month, on which it is partnering with the private health insurance exchange GetInsured, to help taxpayers enroll in the system (see Jackson Hewitt Offers Help with Obamacare).
“So many consumers are having trouble just accessing the system and then once they get in the system, understanding all of their options,” said Brian Haile, senior vice president for health care policy at Jackson Hewitt Tax Service Inc. “I think that’s the number one issue. The number two issue is that they’re being asked a number of questions about their income. They find those questions hard to answer and they don’t have a lot of the information in front of them. It takes quite a bit of time for them to complete the interview even if the system is working optimally. What we’re doing is saying, look, if you’re having your taxes done at Jackson Hewitt, we have 90 percent of the information required to go ahead and do the application for the programs. If you’re interested, we’ll take just five extra minutes and ask you the remaining questions that we need to ask in order to apply and we’ll go ahead and get your application in for you at no extra charge. That will start in our stores on January 6.”
By then, Haile hopes the government will have most of the glitches worked out. But, even if it doesn’t, he’s not worried. “Our system is 100 percent independent of the federal system,” he told me last Friday. “The federal system can crash and burn. I certainly hope it doesn’t and I hope the performance continues to improve, but were that not to be the case, it would not affect Jackson Hewitt clients at all. Our system is entirely separate. We have workarounds so we have no dependence on a functioning federal system.”
He explained that if the federal exchange is offline, then Jackson Hewitt will generate paper-based applications on behalf of the customers and let them sign it. “If the federal system is not working, then we’ll send it in to the clearinghouse, the federal processing center for it to be processed. But the consumer will not be disadvantaged in any way. We did that anticipating that there would be these kind of problems. We built a system that would be able to help people even if the federal system wasn’t performing at peak levels.”
The federal system certainly hasn’t been doing that lately, with experts pointing the finger at the U.S. Department of Health and Human Services for relying on outside contractors to develop the faulty technology on Healthcare.gov, which requires people to fill out all of their information before they can even get an opportunity to compare any health insurance plans and then displaying computer error after computer error onscreen.
Jackson Hewitt is undeterred, however, and plans to help its customers enroll with the new health insurance exchanges across all 50 states and the District of Columbia, as well as offer assistance in enrolling for other federal programs such as Medicaid and the Children’s Health Insurance Program, or CHIP. Before joining Jackson Hewitt, Haile worked as director of the Insurance Exchange Planning Initiative of Tennessee, which prepared for the rollout in that state of the Affordable Care Act exchanges, and earlier as eligibility chief for the District of Columbia’s Medicaid program.
Jackson Hewitt is not licensed to provide health insurance, which is why it is partnering with GetInsured, Haile pointed out. However, it can also help its customers apply for the various tax credits that are available under the Affordable Care Act to assist taxpayers with paying for health insurance coverage. He expects to see other large tax prep providers eventually getting into the business of offering help with enrolling in Obamacare, but he doesn’t think that small tax prep firms will be able to match the scale of Jackson Hewitt’s offering.
“No other company has made an investment in finding that kind of eligibility expertise and figuring out how to integrate that into the tax platform,” he said. “I think that there are going to be larger entities that over time are going to make a play here. Certainly I think Intuit will probably do something like that. We’re absolutely pioneers in this space. No other tax company will have as extensive an offering because they won’t necessarily serve all 50 states, and certainly they won’t serve all eligibility groups. But over time we’ll see if our advantage persists. It will be very challenging for the independent tax practitioners to provide this level of service just because of the complexity of each of these programs.”
As part of their regular work this coming tax season, Jackson Hewitt tax preparers will be telling customers that they need to enroll in a health insurance plan by February 14 or face the possibility of penalties.
“We’re spending time reminding consumers that they need to sign up before Valentine’s Day if they hope to escape the Obamacare tax penalties,” said Haile. “”There’s a nice window during the tax season when folks who are still uninsured can come in and get the help and sign up for coverage and still make sure that they don’t have any tax liability from the individual mandate under the ACA. They have to come in and sign up for these programs by Valentine’s Day in order to escape the penalties. If they wait, they can still sign up through the end of March, but not only will they go uninsured for a longer period of time, and that’s always dangerous, but they then expose themselves to the new tax penalty under the ACA.”