Client Loses Aca Coverage Payback Subsidy?

[saintstigers]

Have a client that signed up on their own thru a link on my site.

She made a mistake on her application and will be losing her subsidy starting in April. She actually qualifies for Medicaid.

She was told she would have to repay the aptc for Jan - Mar. I thought I read somewhere that if you are actually Medicaid eligible that you don't have to pay back APTCs that were mistakenly advanced to you?

 

[Tkruger]

She was provided misinformation.

If the client qualifies for Medicaid then they fall near or below the 100% FPL. That is if the residential state didn't expand Medicaid.

Below 100% FPL there is no clawback
Above 100% FPL it is incremental based on the exact amount.

Regardless even at 130% FPL the clawback wouldn't be much and will not be 100%.

 

[saintstigers]

Sounds good. You sure on this?

 

[Tkruger]

Under the health reform law, states have the option to expand Medicaid coverage to everyone under 138% of the poverty level.

At this time, your state has not decided to expand Medicaid. This means that you or members of your family may need to meet special criteria set by your state in order to qualify for Medicaid. This changed I believe in Jan of 16.

Calculator widget

 

[kgmom219]

Kruger is right.

And from a practical perspective, she's below 100% (or 138) of the FPL. She makes less than $15K a year. She's not paying taxes anyway.

 

[saintstigers]

Would you happen to know exactly where it is stated in the healthcare reform law it is so I can provide it to my client.?

 

[kgmom219]

Would you happen to know exactly where it is stated in the healthcare reform law it is so I can provide it to my client.?

Its not. There was an IRS (Regtap?) Directive last spring. And its on the forum somewhere. But I would start at irs.gov

 

[Tkruger]

Would you happen to know exactly where it is stated in the healthcare reform law it is so I can provide it to my client.?

It is clearly outlined in the pdf file I uploaded to the conversation.

If you have trouble finding it please let me know.

 

[MBSC]

Would you happen to know exactly where it is stated in the healthcare reform law it is so I can provide it to my client.?

See below.

26 CFR 1.36B-2 - Eligibility for premium tax credit.
(6) Special rule for taxpayers with household income below 100 percent of the Federal poverty line for the taxable year. A taxpayer (other than a taxpayer described in paragraph (b)(5) of this section) whose household income for a taxable year is less than 100 percent of the Federal poverty line for the taxpayer's family size is treated as an applicable taxpayer if—
(i) The taxpayer or a family member enrolls in a qualified health plan through an Exchange;
(ii) An Exchange estimates at the time of enrollment that the taxpayer's household income will be between 100 and 400 percent of the Federal poverty line for the taxable year;
(iii) Advance credit payments are authorized and paid for one or more months during the taxable year; and
(iv) The taxpayer would be an applicable taxpayer if the taxpayer's household income for the taxable year was between 100 and 400 percent of the Federal poverty line for the taxpayer's family size.

Reference: https://www.law.cornell.edu/cfr/text/26/1.36B-2

This translates into the instructions for lines 5-7 of IRS income tax form 8962.

Line 6:
Household income below 100% of the Federal poverty line. If the amount on line 5 is less than 100%, you can take the PTC if you meet the requirements under Estimated household income at least 100% of the Federal poverty line, next, or Alien lawfully present in the United States below.

Reference: https://www.irs.gov/instructions/i8962/ch02.html#d0e789

 

[saintstigers]

Thank for the specific reference