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foxmarble

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Arizona
Okay gang who's got the magic answer. With everybody above 400% FPL being SOL there has got to be a player that comes out with a noncompliant ACA plan. This plan I would think would get a lot of traction if they offered a high deductible major med style coverage To cover major medical style Catastrophic events. After seeing some of these premiums I'm quite sure there's going to be a huge market for people who are willing to take the nominal penalty but still want major medical coverage in the event of bad news. Does anyone have a short-term plan that they recommend or know of a carrier that is coming out with a noncompliant plan?
 
Foxie... There will be no mm plans post 2014 unless the confirm to aca standards.... The only thing that wil be there are fixed indemidy plans and with all the carriers preparing for aca they have not poped out a fixed indemnity yet... But they will
 
There will be HSA plans, but they must be ACA compliant.

TaterPeeler is right about there being no major medical plan unless it is ACA-compliant. Unless it is a HIPAA excepted plan (such as short-term), large group, self-funded, or fixed indemnity it cannot be sold unless it conforms to ACA rules, including all 10 EHBs, no lifetime limits, GI, full maternity, etc.

Fixed indemnity has a hope and a prayer, but I have heard nothing but rumors about carriers looking deeply into how to do it and if it will qualify as an excepted benefit plan. To do it, the plan must pay per diem or per time period rather than a reimbursement of expenses. So, it's like the "$100 per day for every day you are hospitalized" type of plan on steroids. And, on steroids it must be, because if it looks anything like the limited benefit plans that have been sold in the last 15-20 years, then most agents that I know would refuse to sell it.

And then, you must consider the premium plus the penalty. Since you are dealing with people over 400% of FPL, then it's important to note that the individual mandate penalty is the greater of the dollar amount or the percentage, and in 2014 the percentage is 1% of household income, capped at the national average cost of the lowest-cost bronze plan. So, at some point, why not just buy the lowest cost bronze plan?
 
And let's not forget legitimate Short Term Medical plans for healthier members of the +400%FPL population. Yes, there's the penalty-tax, but the premiums are 40% to 100% lower than the ACA-compliant policies. As Ann just stated, at some point on the income ladder, one would be better off simply getting a bronze plan, but a millions people will fall in that sweet-spot of STM suitability.
ac
 
And let's not forget legitimate Short Term Medical plans for healthier members of the +400%FPL population. Yes, there's the penalty-tax, but the premiums are 40% to 100% lower than the ACA-compliant policies. As Ann just stated, at some point on the income ladder, one would be better off simply getting a bronze plan, but a millions people will fall in that sweet-spot of STM suitability.
ac

Yes. Taking as an example a single man who makes $120,000 of MAGI income, his 1% penalty is $1,200 ($100 per month). So, if the lowest cost bronze plan costs him too much, but he can pay the $100 penalty plus a much lower premium, then he may be ahead. Provided, of course, that the alternative health plan is a good one.

And if he is a risk taker, then he can say the government cannot collect on that $1200 individual mandate penalty, and he has 3 months to go insurance-free without a penalty anyway, and open enrollment is Oct-Dec every year, so he could potentially game the system by paying for less than 12 months of coverage. Not that he will find a willing agent to help him, but...
 
In a colored-company strategy seminar I attended today, it was pointed out how Accountants and Tax Attorneys are doing a bristling business helping people avoid the penalty-tax.

The primary strategy they're using is adjusting tax deductions and income withholding to eliminate IRS refunds. Their clients will get to keep more of their income through the year and, since the IRS can only collect the ACA penalty-tax via tax refunds, there's no IRS refund available for deduction of the penalty-tax.

ObamaCare is generating a lot of income for a lot of professions. It would be ironic if this law ended up as a hugely effective economic stimulus package, wouldn't it? Another unintended consequence!
:D
-ac
 
In a colored-company strategy seminar I attended today, it was pointed out how Accountants and Tax Attorneys are doing a bristling business helping people avoid the penalty-tax.

The primary strategy they're using is adjusting tax deductions and income withholding to eliminate IRS refunds. Their clients will get to keep more of their income through the year and, since the IRS can only collect the ACA penalty-tax via tax refunds, there's no IRS refund available for deduction of the penalty-tax.

ObamaCare is generating a lot of income for a lot of professions. It would be ironic if this law ended up as a hugely effective economic stimulus package, wouldn't it? Another unintended consequence!
:D
-ac

I didn't think this sounded like a strategy that was safe so I checked with a tax adviser and got this response:

that is a very dangerous position to put those clients in. The ACA tax credit is a refundable credit and that means that the IRS is able to collect if the tax credit was not to be paid. They can enforce this collection through all of the channels available to them, lien, levy, etc.

I would never present a situation to my client to have them in a collection status with the IRS. This is dangerous advice.
 
I didn't think this sounded like a strategy that was safe so I checked with a tax adviser and got this response:

Tim this mirrors a conversation that I had with a fellow agent last week, I am glad that I am not the only person that is scared of the IRS.
 
No liens or levies are possible to collect on an amount owed to the IRS for a penalty for lack of coverage. It's as toothless a penalty as you'll ever see.
 

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