IRS and Department of the Treasury Release Guidance Related to Healthcare & Insurance

This week, the IRS and Department of Treasury released frequently asked questions to assist agents, brokers, and employers on provisions of the Affordable Care Act. The link below provides additional guidance on employer shared responsibility, seasonal worker coverage, minimum value, and small business healthcare tax credits. The new FAQs can be accessed, along with existing FAQs, from the IRS Q&A index page at the link below. The new questions are accessible in the employer shared responsibility, small business tax credit, and employer health care plans sections. http://www.irs.gov/uac/Newsroom/Affordable-Care-Act-Tax-Provisions-Questions-and-Answers If you'd like information regarding the Premium Tax Credits for Individuals and Families see the following link: http://www.irs.gov/uac/Newsroom/Questions-and-Answers-on-the-Premium-Tax-Credit   Centers for Medicare & Medicaid Services (CMS) has sent this Y1 AB MLN Curriculum Update. To contact Centers for Medicare & Medicaid Services (CMS) go to our contact us page.

Are ObamaCare's Tax Credits Harmless? The Little Understood Dark Side Of The Subsidies

Now that the first annual enrollment through the new Health Care Exchanges has ended, it's important to understand how the subsidies that many have received to assist with paying their insurance premiums will be handled by the IRS.  Forbes published a good article regarding how fluctuations in income and other life changes, could affect how the subsidy that you receive can change. 

If your income changes, or your life circumstances change that can affect household income levels, YOU are required to notify the health insurance marketplace (exchange), so that the subsidy can be adjusted accordingly.  If you do not do that, the government will make the adjustments at tax time.

Read more about the way the subsidies work here . . . .

Many have benefitted from the subsidy allocation, but with that benefit comes a responsibility to report any changes that could significantly impact your household income - otherwise there will be tax implications.

What Are The Penalties For Not Getting Insurance By The March 31st Deadline?

Here's a very good synopsis of how the penalty works under the new healthcare law.  As we enter the last phase of the enrollment, many who have not purchased insurance may still be contemplating whether or not to buy it, or whether they should just pay the penalty.  This may help clarify that decision.

Individual Insurance Mandate & Associated Penalty Calculation

There is still a full week left to obtain coverage.  I'm busy helping people this week, but you can also go directly to Healthcare.gov or to a local Navigator to obtain coverage.

Obamacare: To Buy Or Not To Buy–––An Entrepreneur Would Have Done It Differently

Bob Laszewski's blogpost today discusses how the plans under the new Affordable Care Act were built and whether or not people will actually purchase them.  I have had discussions about this with my clients, as to what they will decide to do at the end of 2014, when they will no longer be able to hang on to their 2013 style insurance plans any longer.

Many of these people are self-employed, and do not qualify for any type of subsidy.  Most of them are relatively healthy, and have always carried health insurance on their own.  And yes, it was "real" insurance - not sub-standard coverage.  When the time comes for them to choose an ACA style plan next year for coverage to take effect in the year 2015, they are going to find that their premiums without a subsidy will double in many cases.  The reason for that is that all of the current plans include all of the "essential health benefits" that the government built into every health plan, whether you deem it essential or not.

That is not to say that plans previously didn't have their problems - access to maternity coverage was a huge problem in the individual market.  Often, it was not even offered as an option.  But, maybe they could have found a solution like having every insurance company offer a maternity "option", that people who wanted the coverage could purchase - rather than build it into every plan.  Same for things like pediatric dental.  There were many other ways to have offered these benefits to people rather than baking them into every plan.

As an individual in the marketplace, I should have the right to purchase a catastrophic plan if I so choose, but that right was also taken from me, in the government's zeal to have everyone own a plan that looked very much like employer based plans look and feel.  Well, that's great, if you have an employer either paying for the plan, or kicking in 50% or more.  For those of us who are self employed, or work in places where no health insurance is offered, buying a Cadillac is just not a feasible proposition.

Keep in mind too, that the self employed also pay the maximum amount already on things like social security contributions and Medicare contributions in the form of self-employment tax, since they don't have an employer kicking in a portion of that.  Read Bob's Blogpost Here . . . .

THIS JUST IN: White House offers exemption from insurance mandate for consumers whose plans were canceled

The White House released new guidance that offers some leeway to people who had policies cancelled and found that their options under the new law were more expensive.  They will now be able to qualify for catastrophic coverage (previously only available to those under 30 or who could demonstrate financial hardship), and avoid the penalty.

You can read the full article, from Modern Healthcare, here.  Within the article, you can access the actual .pdf that is the document issued directly by CMS.

There are only 4 more days left to enroll for those who need coverage to be in force by January 1, 2014.  Premium payments (which originally were required to be received by the insurance company prior to January 1), must arrive no later than January 10. Blue Cross Blue Shield of Kansas City requires their first payment no later than January 7.  If you are unsure, check directly with the carrier for clarification.

Enrollments after the 23rd will be processed for a 2/1/2014 effective date.  Enrollments processed after 2/15/2014 will be for plans effective on March 1, and those processed after 3/15/2014 will be effective on 4/1/2014.

Anyone who hasn't enrolled in a policy during this initial enrollment period, will have to wait until next year's enrollment to sign up or to make changes to existing plans.

Obamacare Week 10––A Dearth of Enrollment In the States and Continuing Backroom Problems

Here's an update from Bob Laszewski regarding the current status of the enrollments through the Federal Marketplaces, and in the states that currently have a state run marketplace.  There is also data here about how various aspects of system corrections and development are going. 

The one point here that I found very troubling was the item that notes that the federal government hasn't built a payment system that would provide insurance companies with the premium subsidy payments.  They are expecting the insurance companies to bill them for these amounts.  It makes me wonder how long it will take them to get paid, and how that money will be tracked through the various private & government systems.

Also troubling was all of the confusion and inability to deal with Medicaid enrollments.

We'll see how the end of the year plays out.  I am hearing from people I deal with that they are actually able to get through the process now using Healthcare.gov, so at least they've made improvements there and some are getting approved for subsidies and enrolled.  Let's hope the improvements continue.

To read Bob's blog entry, please click here.

Correction to Previous post regarding Hospital Subsidies . .

The article referenced in the previous post was from the New York Times (not the Wall Street Journal) - I apologize for the error.