ACA subsidy revoked, then reinstated

[Mr._Graybeard]

When I applied for health insurance on the marketplace for this year, the app included a requirement that I document income for 2015. Since my income records at that point included all my 2014 income tax documents -- 1099s and such -- I uploaded them at the healthcare.gov website.

Well, the premium bill for April arrived last week, and our tax credit was not on it. I called the healthcare.gov help line, and the guy I talked to reinstated the tax credit for more than we were granted in January! His competence ended there, though -- he bumped us onto an insurance plan different from the one we originally applied for. He also said I had to file further proof of income, which is due June 17.

I uploaded a bank statement showing our direct pension deposits and a paycheck deposit from DW's part-time j*b. Hopefully, that will satisfy them. Otherwise, I imagine we'll be doing this dance again in July.

Has anyone else had their subsidy revoked?

[pb4uski]

No, but I have gone through similar income documentation requirements in relation to getting an exemption certificate.

This whole forward looking aspect of Obamacare subsidies is stupid. The Health Insurance Marketplace wrote to me asking that I provide a 1099-SSA, current pay stub, self-employment ledger, unemployment benefits letter or W-2 to document our income despite my explaining in our initial application that we were retired and that our gross income was principally interest, dividends, capital gains and pension distributions.

I wrote back to them and told them that each of the items that they requested were not applicable since we do not work, are not self-employed or unemployed and do not receive social security benefits. I still haven't heard anything since responding in mid January. What a cluster you-know-what.

[MRG]

Here's a thread where another member is having issues.

http://www.early-retirement.org/foru...ad.php?t=76193

I have the same fears. I wrote and explained the same lack of available documents that fit their criteria. Haven't heard back since January.

[BuysToys]

On March 16, I received an e-mail notice that I had messages at the Marketplace. I logged into my account and saw two messages, both dated the same. The first stated that I did not qualify for a subsidy as I had not verified my income for 2015. The second stated that I did qualify for a subsidy and gave me the amount.

I've also received three or four phone calls to "remind" me to verify my income. The most recent one was last week and I told them that I had sent the paperwork to them three times so far as I have received three separate requests for verification.

*meh* However it comes out this year, I'll just roll with the punches.

[pb4uski]

Just for giggles, I called the Health Insurance Marketplace to find out the status of my exemption application.

As a short history, I filed for an exemption for 2014 in December of 2013, shortly after the exemption application form became available. The first acknowledgement or contact that I had on my application was a letter requesting additional information in early January of 2015, 13 months after I applied. I responded to that request in mid January of 2015 and have still not received any acknowledgement or response. When I called just now, the supervisor that I talked to could see that my January response had been received and was still being processed so she initiated a request for them to expedite processing.

Luckily it doesn't have an adverse impact on us in that I have obtained the catastrophic coverage that I wanted directly with the carrier but their overall ineptitude of the Health Insurance Marketplace is frustrating.

[Mr._Graybeard]

Ineptitude is right. The first time I called, the guy on the other end of the line seemed to have trouble verifying my address. We've lived in the same house for 27 years! How hard can it be?

[gauss]

Not to be a defender of the Marketplace -- however they need to have a good understanding of your income and # of individuals in your household.

The advance premium tax credits are based upon this information. At the end of the year, the credits are reconciled with your actual income, # in household, filing status etc. I am seeing cases where people forecast their income low and now need to return a significant portion of their APTCs.

An even worse case is if there is a miscommunication about your filing status (ie "single - I haven't lived with my wife for 5 years....") Of course if you are not legally separated or divorced in reality you will be Married Filing Separately in which case NO PTCs are allowed.

Most of the folks around here could handle the situation of paying back APTCs if necessary, but we do not represent the general public in our lack of cash flow constraints. Fortunately the IRS in, general, will allow financing of up 72 months if you owe less than $50,000.

-gauss

[sengsational]

I was asked to upload documentation as a part of my 2015 application. I did it 2 times (each time uploaded the same PDF that contained images of several bits of "proof"). I got the email again (and the phone call), so I printed the dang PDF and mailed it (with signature confirmation), along with the cover sheet thing they provided. That seems to have done it.

[rodi]

This is one of the reasons I'm paying full freight through the marketplace (in my case, CoveredCA) and will get my "subsidy" back in the form of a refund. My 2014 income was far to high to qualify but now that I'm retired, my 2015 income will qualify. The subsidies are really just tax credits - that you are able to collect in advance if you choose.

My other reason for doing it this way is that CoveredCA has a glitch - if you are receiving subsidies up front then ALL members of the household must be on the same insurance policy... and my husband wanted a different insurer that me and the kids. (This is *not* an issue on the national exchange - it is a software "feature" of CoveredCA and supposed to be fixed for 2016 enrollment.)

Sure I'm giving the government money up front - but I'll get it back and won't have the hassles described here.

[pb4uski]

And with today's interest rates the cost of the time value isn't particularly high.

I decided not to go for subsidies for similar reasons that I didn't want to deal with healthcare.gov, but only get caught up in this Health Insurance Marketplace stupidity because I'm supposed to have an exemption certificate to buy a cat policy and the exemption process depends on income.

[gauss]

Quote:

Originally Posted by pb4uski And with today's interest rates the cost of the time value isn't particularly high. I decided not to go for subsidies for similar reasons that I didn't want to deal with healthcare.gov, but only get caught up in this Health Insurance Marketplace stupidity because I'm supposed to have an exemption certificate to buy a cat policy and the exemption process depends on income.

Were you just going to pay the penalty then for 2014 assuming that the marketplace doesn't issue a hardship exemption?

For 2015 I think the penalty increases by a factor of 2-3x.

I do know that they have reopened healthcare.gov until the end of Apr for those individuals who were assessed the penalty for not having minimum essential coverage (MEC) in 2014.

On the other hand, under current law the IRS is prohibited from assessing failure to pay penalties or taking collection actions for a failure to pay the penalty for not maintaining MEC. They of course would offset any refund in the future by the amount of the penalty plus interest.

-gauss

[pb4uski]

No, I had insurance all of 2014 (six months bronze, six months cat) so no penalty is in play. The reason for getting the exemption certificate is that the state exchange initially was going to require one before selling a cat policy to someone under age 30.

The problem in the first half of 2014 was that the feds were not processing exemption applications so I couldn't get an exemption certificate, which was an alleged prerequisite to buy a cat policy. After a few months of inaction I started raising cain with my state legislators, Governor's office and congressional delegation and effective July 1 the state exchange magically allowed me to buy a cat policy directly from the carrier. I'm still not sure why since I didn't have the exemption certificate but I wasn't about to complain about it.

[John Galt III]

Quote:

Originally Posted by Mr._Graybeard When I applied for health insurance on the marketplace for this year, the app included a requirement that I document income for 2015. Since my income records at that point included all my 2014 income tax documents -- 1099s and such -- I uploaded them at the healthcare.gov website. Well, the premium bill for April arrived last week, and our tax credit was not on it. I called the healthcare.gov help line, and the guy I talked to reinstated the tax credit for more than we were granted in January! His competence ended there, though -- he bumped us onto an insurance plan different from the one we originally applied for. He also said I had to file further proof of income, which is due June 17. I uploaded a bank statement showing our direct pension deposits and a paycheck deposit from DW's part-time j*b. Hopefully, that will satisfy them. Otherwise, I imagine we'll be doing this dance again in July. Has anyone else had their subsidy revoked?

What a horror story! I am still getting my subsidies, thank goodness, but I have received letters asking for 2015 income verification, with warnings that subsidies and cost sharing may end. I snail mailed the docs a month before they were due, got no response, called hc.gov, they were clueless, as expected, but did leave a note on their system that I had called claiming to have mailed them. I then also uploaded the same docs via computer, and the only acknowledgment I got for that was that the *verify* button on hc.gov got changed to *submitted*. Still no online messages and still no snail mail confirmation of anything. I guess no news is good news.

[MBSC]

I don't qualify for a cost-sharing subsidy so I pay the full premium each month and collect the premium subsidy as a tax refund in order to avoid these types of issues. It doesn't hurt that my credit card pays me 2% cash back on the premium when those funds would otherwise earn 1% in a savings account.

[Fermion]

I predict big problems for us next year when we apply for cost sharing and subsidy.

They just are not going to believe we went from $260k to $26k income.

I better buy the 1000 minute plan on my cell phone as I think my normal usage is going to go way up.

[Mr._Graybeard]

I do think things are going to get better if the system survives. I understand a lot of the bugs are transitional, but some are just poor execution.

I've done enough "new-to-me" j*bs to recognize that unfamiliar duties tend to produce unforced errors. My biggest gripe before we temporarily lost the subsidy was the timing of the deadline for documentation, Feb. 13. I still hadn't received all my 2014 tax documents by then. How could I provide something I hadn't yet received? It's symptomatic of the whole "forward-looking" income verification concept, which, as pb4uski noted, is just dumb.

[Helen]

I uploaded my "proof" of 2015 income documents last December. I received a letter last Friday stating that I didn't qualify for a subsidy. Our income took a huge drop and I guess they didn't like my explanation. I will probably call them when I am in the right frame of mind to deal with it in the next day or two.

[gauss]

Quote:

Originally Posted by Helen I uploaded my "proof" of 2015 income documents last December. I received a letter last Friday stating that I didn't qualify for a subsidy. Our income took a huge drop and I guess they didn't like my explanation. I will probably call them when I am in the right frame of mind to deal with it in the next day or two.

Helen,

Remember that when you file your taxes next year, as long you purchased your insurance on the exchange and met the various other requirements (100% < MAGI income in 2015 < 400% of federal poverty level, not filing married filing separately (MFS), etc....) you will be able to claim your subsidy (PTC) on your tax return -- the exchange does not need to grant you an advanced subsidy for this purpose. IRS Form 8962 (along with exchange issued 1095-A) has all the details.

This, of course, assumes that you can cash flow the insurance payments without the subsidy throughout the year until you get the subsidy on your taxes.

-gauss

[MBSC]

Quote:

Originally Posted by gauss Helen, Remember that when you file your taxes next year, as long you purchased your insurance on the exchange and met the various other requirements (100% < MAGI income in 2015 < 400% of federal poverty level, not filing married filing separately (MFS), etc....) you will be able to claim your subsidy (PTC) on your tax return -- the exchange does not need to grant you an advanced subsidy for this purpose. IRS Form 8962 (along with exchange issued 1095-A) has all the details. This, of course, assumes that you can cash flow the insurance payments without the subsidy throughout the year until you get the subsidy on your taxes.

True, but you have to use the "in advance" process if you also want the cost-sharing subsidies (100%-250% FPL).

[Fermion]

I hope the "proof" of low income gets easier as years go by.

2014 MAGI $260k
2015 MAGI $50k
2016 and beyond MAGI $22k to $25k

Some time around 2016, 2017 there should be some document to prove we are income poor. Maybe the previous year 1040?