Next OEP - Clawback / Income Projection NIGHTMARE

Yagents

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Arizona
You thought this year was hectic, wait til next OEP. Since most of my clients are self employed/business owners, this will just be fun fun fun:

Dec 1st, 2014 discussion:

Me: "Joe, you projected your income for 2014 to be X, and you received $300/mo subsidy based on X. I know the year hasn't ended yet, and you haven't done your books yet, but do you know whether or not your were close to 'X', as it will determine whether or not you get a tax refund, or owe the gov't a clawback".

Client: "I have no fricken idea what my income will end up being in 14"

Me: "Well, it is, what it will be. But let's move on, as it's OEP again, and now I need you to project your 2015 income to determine your subsidy"

Client: "Click"
 
You thought this year was hectic, wait til next OEP. Since most of my clients are self employed/business owners, this will just be fun fun fun:

Dec 1st, 2014 discussion:

Me: "Joe, you projected your income for 2014 to be X, and you received $300/mo subsidy based on X. I know the year hasn't ended yet, and you haven't done your books yet, but do you know whether or not your were close to 'X', as it will determine whether or not you get a tax refund, or owe the gov't a clawback".

Client: "I have no fricken idea what my income will end up being in 14"

Me: "Well, it is, what it will be. But let's move on, as it's OEP again, and now I need you to project your 2015 income to determine your subsidy"

Client: "Click"

Oh good lord I hadn't even been able to get passed how screwed up this year has been to think of that.

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I just hit double digits on exchange business this week. Thank goodness!!!

If you aren't in too deep yet run away while you still can.
 
Remember the client can go back in and change how much of the subsidy they take through out the year. Hopefully by 2015 that will have been built out on healthcare.gov. We shall see. I doubt this will be a big deal in the future. What I think will be the next big news is those who enrolled the family by themselves and did not realize the kids were kicked to Medicaid. Those will be the next big stories this spring. The fall will the those groups who are dropping coverage and when the carriers start talking about the losses they are having.
 
And sandwiched in between will be the number of people that never got their ID card (for whatever reason) and those that dropped coverage (again, for whatever reason).

Obamacare is the "gift" that keeps on giving. The story is not going to die.
 
I think the more fun scenario comes when your "subsidy eligible" client files non-eligible income for 2014 (of course, in April of 2015).

June comes around, IRS finally processed it. Client had a year of subsidy, plus 6 months on the next year's plan, none of which they should have gotten.

Do you have to requal? Just pay back the whole subsidy from your tax return and continue to claim subsidy? Will you have to prove subsidy-eligible income mid year? Provide proof at the 2016 OEP? Can they kick you off for lying? Can they kick you off for "mis-estimating", or "failure to report a change in income that changes eligibility mid-year"?
 
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