Premium Recalc Question--IRS V HC.gov

[yorkriver1]

Anyone who just let their ACA subsidy plan roll over into 2015 because their income is the same in 2015 still may have received a premium increase. Premiums went up across the board, also, age increases. That increase in their billed amount could possibly have been lowered by recalculating their subsidy based on 2015 2nd lowest silver by doing a "life change" app. adjustment.

Here is the question: If their subsidy for the year would have been higher with that recalc, but they didn't have it done during 2015, would it be refunded at tax time 2016?

 

[AllenChicago]

For what its worth, here's a Kaiser FAQ on the subject...

Q: What happens if I don’t update my application for financial assistance?

A: If you live in a federal Marketplace state and you don’t update your application, in most cases, healthcare.gov will automatically continue the amount of your 2014 premium tax credit for 2015. If that turns out to be less than the amount you’re actually eligible for in 2015, you will have to pay more premium each month than you otherwise would have had to, although you can receive a refund for the rest when you file your 2015 tax return. If the 2014 premium tax credit amount turns out to be more than you are actually eligible for in 2015, you will have to repay all or part of the difference when you file your 2015 tax return.

Source: Health Reform FAQs | The Henry J. Kaiser Family Foundation

 

[RayNY]

For what its worth, here's a Kaiser FAQ on the subject...

TL;DR Subsidy continues at same amount as previous year. It is reconciled at tax time, difference is deducted or bonused to tax return as appropriate.

 

[yorkriver1]

Great, good help. Marketplace employee said, no if they don't redo the app for 2015, they can't get excess premium paid in as a tax refund, even if eligible. (I know, I know--but some of them are really helpful) Just needed documented facts, thanks. I thought it was as shown in the Kaiser material, but second guessed after that call to Marketplace.

 

[MaryDallas]

When I saw there was a 23% rate increase for 2015 I began to question this: what about the statements carriers had made that 'over 10% would have to go through a major approval so most carriers will try to keep it at 10%'. So that is when I discovered that every person has to update their marketplace file (even if everything is the same) to also get the increase in tax credit, which then keeps it at about 10% increase.

So not only did I have to redo every file from 2014 but also add new people for 2015. This was a huge amount of work. I had to contact every client from 2014 and redo their files as well. I had them either authorize me on their marketplace file or do a three-way call. Most clients just authorized me on their file and I took care of it for them. Every one of them were the same, however, they would not get the increase in tax credit if the file was not updated. What about the check mark that states click here and we will be able to get updated information for five years? That doesn't work either.

I found this out by trial and error; questioning the 23% on every level. It is not like it was common knowledge. The carriers had no answers. Finally, a supervisor with the marketplace told me that to get the increase in subsidy the file has to be 'updated' even if everything is the same.

I had a client that was on the Texas Risk Pool that told me his subsidy was increased yearly, which at least gave me a clue. ACA is much like the prior Texas Risk Pool which is now replaced with ACA.

On all of my 2014 clients I was able to keep their premiums the same or a few dollars less by changing their plan ever so slightly...possibly instead of a zero deductible change to a $200 deductible.

 

[ameneses54]

When I saw there was a 23% rate increase for 2015 I began to question this: what about the statements carriers had made that 'over 10% would have to go through a major approval so most carriers will try to keep it at 10%'. So that is when I discovered that every person has to update their marketplace file (even if everything is the same) to also get the increase in tax credit, which then keeps it at about 10% increase.

So not only did I have to redo every file from 2014 but also add new people for 2015. This was a huge amount of work. I had to contact every client from 2014 and redo their files as well. I had them either authorize me on their marketplace file or do a three-way call. Most clients just authorized me on their file and I took care of it for them. Every one of them were the same, however, they would not get the increase in tax credit if the file was not updated. What about the check mark that states click here and we will be able to get updated information for five years? That doesn't work either.

I found this out by trial and error; questioning the 23% on every level. It is not like it was common knowledge. The carriers had no answers. Finally, a supervisor with the marketplace told me that to get the increase in subsidy the file has to be 'updated' even if everything is the same.

I had a client that was on the Texas Risk Pool that told me his subsidy was increased yearly, which at least gave me a clue. ACA is much like the prior Texas Risk Pool which is now replaced with ACA.

On all of my 2014 clients I was able to keep their premiums the same or a few dollars less by changing their plan ever so slightly...possibly instead of a zero deductible change to a $200 deductible.

I had noticed the discrepancy you address after auto re-enrollment when clients started calling to ask why their premiums had gone up 10 times or more with the same financial information. At this point, I had 2 options, update minimally their financials and get no commissions (renewal) or do a new app through Sherpa in 5 minutes. You guess which option I chose. Just a quick advice, don't remove the old application (just cancel it), it may be useful if the Marketplace messes things up.