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Old 07-07-2013, 11:19 AM   #61
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What will be the penalty if you're caught getting a subsidy that you don't qualify for? Just return of the subsidy? Will there be any additional penalty?
Based on recent statements from officials, it appears there will be no attempts to verify what folks claim regarding their access to "affordable" insurance through their employer. From this piece:
Quote:
The government is going with what Kliff and Somashekhar call “the honor system.” “We have concluded that the…proposed rule is not feasible for implementation for the first year of operations,” say the Centers for Medicare and Medicaid Services. “The exchange may accept the applicant’s attestation regarding enrollment in an eligible employer-sponsored plan…without further verification, instead of following the procedure in 155.320(d)(3)(iii).” And it’s not just there. The feds will also allow people to gain means-tested subsidized coverage on the exchanges without having to…test their means. “For income verification, for the first year of operations, we are providing Exchanges with temporarily expanded discretion to accept an attestation of projected annual household income without further verification.”
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Effectively, states no longer need to expand Medicaid, because this newly Medicaid-eligible population can now sign up for the exchanges, at no cost to the state, and know that their incomes won’t be verified by the IRS (because their incomes are too low to file tax returns). That is to say, if your income is at 90 percent of the federal poverty level, and you live in Texas, where the state isn’t expanding Medicaid, all you have to do is write on the form that your income is actually 105 percent of FPL, and magically, you qualify for the exchange. I could easily envision certain activist groups signing people up for coverage this way.
As the article points out, this federal flow of "free" money will only work for states that didn't set up their own exchanges. States that did what the government wanted them to do (set up an exchange) will have to find another loophole.

Observation: When benefits or taxes are set up with absolutely no enforcement mechanism, what we really have is a system that subsidizes and encourages cheating. The only folks who are penalized are honest ones, and they soon rightly begin to feel more like "suckers" than good citizens. That's not good for society.
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Old 07-07-2013, 12:04 PM   #62
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As pointed out in the HHS announcement and also in the Sarah Kliff write-up, audits will be done on employment information supplied by exchange applicants to verify their claim regarding employer coverage.
Quote:
“The exchange may accept the applicant’s attestation regarding enrollment in eligible employer-sponsored plan . . . without further verification,” according to the final rule.

The federal government will, however, conduct an audit for the states where it is managing the new insurance Web portal.
Premium assistance will be provided based on estimated income, then verified after the fact by the IRS, as before. This is not new. What has changed is the exchange is not required to verify estimated income, it is now discretionary, with audits. This is how the IRS works today.

Quote:
While initial regulations had proposed an audit of each consumer who reported an income significantly lower than what federal records indicated, the final rule scaled that back to an audit of a statistically significant sample of such cases.
They didn't call this "the honor system". They (Kliff and Somashekhar) used those words for a different purpose and Roy re-purposed them. The last time I read such an effort to misportray something related to PPACA was also by Avik Roy, so this comes as no surprise. He is a fountain of confusion, misrepresentation and misdirection. He doesn't like the PPACA and misses no opportunity to show that, even when he has to resort to flawed reasoning to do so. His point about this being used as a backdoor to get more benefits to the low income population in states that didn't expand Medicaid is entirely bereft of fact or reasoning.

The Kliff article he references can be found here Health insurance marketplaces will not be required to verify consumer claims - The Washington Post
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Old 07-07-2013, 02:24 PM   #63
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Premium assistance will be provided based on estimated income, then verified after the fact by the IRS, as before. This is not new.
The whole thing is "new" (as in, "never yet tried"). And it looks like we won't get a chance to see how the envisioned system will really work until 2015.

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What has changed is the exchange is not required to verify estimated income, it is now discretionary, with audits. This is how the IRS works today.
Of course the main thing that has changed is that large employers don't have to provide health insurance that meets ACA standards for an additional year. That's a biggee.
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Old 07-07-2013, 02:52 PM   #64
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The whole thing is "new" (as in, "never yet tried"). And it looks like we won't get a chance to see how the envisioned system will really work until 2015.

Of course the main thing that has changed is that large employers don't have to provide health insurance that meets ACA standards for an additional year. That's a biggee.
No disagreement there.
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Old 07-07-2013, 04:49 PM   #65
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Seems like this is getting misstated. The mandate wasn't delayed, it was the reporting requirements ( per the treasury release ). Maybe that is a defacto delay of the mandate.
Since 96% of employers in this category already provide insurance, it seems there would be a simpler reporting method to get to those few that don't.

Statement: Administration Delays Employer Health-Care Mandate - Washington Wire - WSJ
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Old 07-07-2013, 08:52 PM   #66
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Seems like this is getting misstated. The mandate wasn't delayed, it was the reporting requirements ( per the treasury release ). Maybe that is a defacto delay of the mandate.
Since 96% of employers in this category already provide insurance, it seems there would be a simpler reporting method to get to those few that don't.

Statement: Administration Delays Employer Health-Care Mandate - Washington Wire - WSJ
The last two paragraphs of the Treasury announcement make it pretty clear: Employers don't have to provide insurance until 2015 (though it will be "encouraged") and there will be no penalty (the euphemistically named "shared responsibility payments") for failing to provide coverage.
Quote:
Accordingly, we are extending this transition relief to the employer shared responsibility payments. These payments will not apply for 2014. Any employer shared responsibility payments will not apply until 2015. During this 2014 transition period, we strongly encourage employers to maintain or expand health coverage. Also, our actions today do not affect employees’ access to the premium tax credits available under the ACA (nor any other provision of the ACA).
If/how that access to "premium tax credits" will occur for those who are covered by employers is not fully explained. Such people shouldn't get any "premium tax credits" but since employers don't have to provide any reporting--it will be up to people to self report. And now we need to see an estimate of the increased federal outlays for premium subsidy payments that will occur because the administration is letting employers off the hook. That will probably be contained in the additional Treasury info that was promised.

I wonder if Congress will get a chance to vote on what the ACA has become.
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Old 07-07-2013, 09:19 PM   #67
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Congress has voted several times since the passage of ACA.

They've also filed cases to courts around the country.

No do-overs, time to implement.
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Old 07-07-2013, 09:31 PM   #68
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No do-overs, time to implement.
I agree. No foot-dragging or excuses. No "Oops, this is hard." Implement exactly what Congress passed on the timeline they specified so we can all see how this works.
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Old 07-07-2013, 09:54 PM   #69
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Congress has voted several times since the passage of ACA.

They've also filed cases to courts around the country.

No do-overs, time to implement.
Congress did NOT vote on what ACA has become, inc thousands of pages of regulations written since its passage. We have witnessed changing effective dates stated in the law (e.g. SHOP & Employer mandate provisions), expansion of 2014 open enrollment period beyond initial determination, and now (for at least 1st yr) no verification of income for Exchange applicants. These issues may prove to have significant impact on at least 1st 1-2yrs of ACA's total cost to gov't (i.e. taxpayers).

Agree that ACA was passed & upheld by SCOTUS, and that a civil society SHOULD implement properly passed laws. But ACA is NOT being fully implemented, at least not according to the Law's text. To many, that IS a "do-over"- at least of certain key provisions of ACA. There is a fear that these repeated substantive delays may affect ACA's long-term political viability, particularly since (unlike SS or Medicare) it was passed without substantive bipartisan support.
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State run healthcare exchanges and verification of subsidy
Old 07-08-2013, 02:13 AM   #70
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State run healthcare exchanges and verification of subsidy

Looks like state run exchanges will not have to verify eligibility for healthcare subsidies for another year. Given that final subsidies are based on actuals anyway (as opposed to projected income), it really should not have an impact.

U.S. relaxes health law income, insurance status rule for exchanges - Yahoo! Finance
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Old 07-08-2013, 05:53 AM   #71
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Huge impact. I go in and claim 140% FPL so I get virtually no co-pays and low deductible. At year end I find I am eligible for 390% plan. I have to pay increased premiums but I have still had low deductible and low co-pay. No crawl back provision that I am aware of.
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Old 07-08-2013, 06:06 AM   #72
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Given that final subsidies are based on actuals anyway (as opposed to projected income), it really should not have an impact.
Very minimal impact, overall.
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Old 07-08-2013, 06:39 AM   #73
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All right, we now know the PPACA employer mandate isn't going to be implemented for another year, and we are all suitably outraged. Lets now get the thread back on topic, which is how this affects us and what things we need to do to prepare ourselves for the Oct availability.
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Old 07-08-2013, 06:44 AM   #74
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This is already being discussed in another thread, so it's probably a good idea to merge the two.

Edit: threads merged. Now, back on topic, how does this affect us and what things should we do to prepare, if any?
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Old 07-08-2013, 01:40 PM   #75
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So I'm covered by a large employer in CA.

If I retired within the next 12 months, I would just go apply for the CA exchange?

IOW, ACA as the trigger point for ER? Or maybe COBRA is a better option while we see how things shake out for the first year or two?
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Old 07-08-2013, 05:59 PM   #76
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So I'm covered by a large employer in CA.

If I retired within the next 12 months, I would just go apply for the CA exchange?

IOW, ACA as the trigger point for ER? Or maybe COBRA is a better option while we see how things shake out for the first year or two?
As I understand it, and I could well be mistaken or the rules could change, you could go from COBRA to an Exchange but not back again (even if within your COBRA time allowance). So best to be sure Exchange would serve you better, which is difficult to do at this point in most states.
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Old 07-08-2013, 06:05 PM   #77
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Huge impact. I go in and claim 140% FPL so I get virtually no co-pays and low deductible. At year end I find I am eligible for 390% plan. I have to pay increased premiums but I have still had low deductible and low co-pay. No crawl back provision that I am aware of.
Don't know how that really work out in practice. If Feds decide to charge you significant interest on setting up, it could be costly. Or more costly if they decided you deliberately falsified income & decided to charge fraud.
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Old 07-08-2013, 07:42 PM   #78
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As I understand it, and I could well be mistaken or the rules could change, you could go from COBRA to an Exchange but not back again (even if within your COBRA time allowance). So best to be sure Exchange would serve you better, which is difficult to do at this point in most states.
I plan on starting with COBRA later this year and sticking with it a while to see how things play out with the exchanges. Might cost me more in the short run, but leaves more options open.
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Old 07-10-2013, 11:34 PM   #79
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I agree. No foot-dragging or excuses. No "Oops, this is hard." Implement exactly what Congress passed on the timeline they specified so we can all see how this works.
They can't. They still haven't read it.
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Old 07-11-2013, 02:13 PM   #80
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An interesting take (link) on some of the (predictable) IT issues that may be part of the reasons for the delay in the employer mandate. And the relative importance of various functions of the law as viewed by various constituencies.

Quote:
As the law (and all the wonks) had described them, the exchanges needed real-time data from the IRS, in order to calculate whether purchasers were eligible for subsidies, and how big those subsidies should be. In order to determine subsidy eligibility, they also needed to know whether your employer had offered you health coverage costing no more than about 10% of your family income, as they were required to by law (and subject to a fine if they didn’t). Only those who couldn’t get affordable employer coverage were eligible to purchase subsidized insurance on the exchange.
That’s two sets of big, secure databases that needed to be hooked into just for the subsidy part. One of them had to be created from scratch, and it wasn’t clear to me that the IRS was ready to deliver real-time payroll data, either.
Then there was supposed to be some sort of hook into the state Medicaid systems, for those below 133% of the poverty line. There was also, of course, the part where insurers sell you insurance. That seems like an enormous project all by itself.
and
Quote:
It turns out we were all missing something. I was right that the administration could not possibly implement the exchanges that had been described when selling the law, described in the law itself, and described by all the wonks who supported the law after we passed it and found out what was in it. But I was wrong that the administration viewed this as an essential part of “getting the exchanges up and running on time”. Instead, they were going to start jettisoning large chunks of what they’d promised.

. . .
In one view, Obamacare really has only one feature: putting as many people as possible onto the insurance rolls. As long as you’re doing that, nothing else matters–not cost control, not fraud prevention, not the words in the Patient Protection and Affordable Care Act. Take them away and Obamacare still exists, as long as there are exchanges with subsidies.
Things will get a lot clearer, for ER types and those still working, once there's more info on how this implementation is supposed to proceed with big hunks ripped out of it.
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