Has Anyone Applied for an Exemption for Clients

[infoseeker]

I have a client that is being offered health insurance for him and his wife through his wife's job. they make 30k a year qualify for a subsidy but cant get the subsidy because of employer coverage being offered which is $500 a month. I spoke with a rep from UHC and they said that they can apply for an exemption for hardship being that the insurance offered at the job may be affordable.

Has anyone tried to do this? Is there a % of income that qualifies for exemption if its too high a premium from the employer? is it a lengthy process? she told me i would have to go direct to healthcare .gov to apply for exemption and cant go through carriers online app or other quoting software apps. any feedback much appreciated.

 

[dgoldenz]

The exemption is available if employer coverage is more than 9.5% of income or if individual coverage is more than 8.5% of income. Has to be done through HC.gov, haven't had a client do it yet, but am afraid it will fall into the HC.gov abyss when they mail it in (no online app for this, that would make too much sense obviously). I was told 10-15 business days from time of submission for a decision. Then they have to wait for it in the mail....good luck.

 

[Dave020]

9.5% of the employee-only self-pay premium. This is the "family glitch" rule and you have to use the family's MAGI against the portion of the premium that only the employee pays for his/her own single coverage (not including family members premiums).

 

[infoseeker]

So explain what it would mean in this situation. Couple MAGI income is around $30,000. Th job is offering the wife who is the only employee a plan that is $500 a month for both her and her husband. how do you break it down? would they qualify for a subsidy? Appreciate any feedback

 

[RayNY]

Dave is right, this is one of those situations where the "family glitch" applies. Dgoldenz is right with the process, this has to go through the exchange.

Employee Contribution for individual premium must be more than 9.5% of MAGI household income.

Employee contribution, not premium
Individual rate only, not ES/EC/Family.
MAGI Household income, not the individual's income.

In some situations, Family premium can be more than the client's post-tax income for the household, and they still won't qualify thanks to the Family Glitch.

Infoseeker, could you please clarify a few things?
Is the $500/month premium their contribution, or the total premium?
Is it the individual, or Employee/Spouse rate?
Is the $30k income the wife's income or the combined household income?

 

[infoseeker]

Is the $500/month premium their contribution, or the total premium?
>>>ITS THE TOTAL PREMIUM

Is it the individual, or Employee/Spouse rate?
>>>its the rate for both the husband and the wife


Is the $30k income the wife's income or the combined household income?
>>>>Its combined household income


Note: They have 3 small children that are on medicaid

Thanks

 

[Dave020]

You have to find out how much the total monthly premium is JUST for the employee. Then find out how much of that total monthly premium for just the employee is paid by the employer and how much is paid from the employee. The amount paid by the employee out of his/her pocket is the number used to calculate affordability. Spouse and dependent premium costs are irrelevant under the affordability test.

For example:

employee and family make $30k MAGI per year
employee only premium for employer plan is $300 total per month
employee pays 25% of premium ($300) or $75 and employer pays 75% or $225

Employee's self-pay premium is $75 per month or $900 per year. This is the basis for the affordability test. at 9.5% for the test, in this scenario any MAGI above $9,473,68 means the employer plan is considered "affordable" and no subsidy in the marketplace is available.

It's family MAGi against the employee-only premium that is self-pay. Added premium for other family members is never counted.

 

[infoseeker]

Okay got it. Thanks much appreciated