How to Handle the "Family Glitch Question"

[SecureHealth1]

After soaking up more and more information about nobamacare, it has been said that for 2014 their is no way to track or determined if someone is NOT eligible for a subsidy because their spouse is covered by an employer plan which makes the spouse and dependents ineligible for a subsidy. Lets say a prospect calls your office, he or she needs a quote on individual for themselves or their kids, their spouse is covered on an employer plan but cannot afford to pay the family group rates, are we to ask if their spouse works for a large or small group? I am told the "glitch" does NOT apply to the small group/under 50 market BUT their is now way to track that in 2014?? Most carriers are saying for the first year their is no way to report/track if they are indeed eligible based on whether their spouse group coverage is thru a large or small group? Its as though the first year they are looking the other way? With so many people having the option for group coverage thru their spouse but cant afford it, how do we determine who we can say, yes, you get a subsidy based on your income, or no, you don't qualify for a subsidy?

 

[stuy119]

Am I mistaken, or are you openly advocating fraud in an online, public forum?

Maybe we do deserve to fight against navigators for business. Maybe we do reap what we sow.

 

[taterpeeler]

IRS will check it on the backend... Meaning when taxes are filed for 2014...you screw it up and they will blame you if they owe 8 grand or so in clawback

 

[Ann H]

Don't tell them if they get a subsidy or not. Tell them that based on the information they gave you, it appears they very well might qualify, but they will have to complete the subsidy app to be sure.

By the way, the family glitch applies to small group, too. The family glitch is where family members are not eligible for a subsidy if they are eligible for an employer-sponsored plan that is adequate and affordable as based on the self-only premium, without regard to how much it costs to add dependents. This is true whether the employer sponsored coverage comes from a large group or a small group. Where you may be confused is that there is another rule that sounds a lot like this, and it is the large-group employer penalty that says the employer is penalized if the premium is not affordable as based on the same self-only premium. That is one of the penalties that has been delayed, by the way.

 

[houcoogster]

Thanks for clearing the glitch thing up. I thought for a second when I red his post I missed something.
One other thing, you say they will have to complete the subsidy app.
How does that work on the phone or in person don't we enter their info for them? Isn't that the first part of the process.

Don't tell them if they get a subsidy or not. Tell them that based on the information they gave you, it appears they very well might qualify, but they will have to complete the subsidy app to be sure.

By the way, the family glitch applies to small group, too. The family glitch is where family members are not eligible for a subsidy if they are eligible for an employer-sponsored plan that is adequate and affordable as based on the self-only premium, without regard to how much it costs to add dependents. This is true whether the employer sponsored coverage comes from a large group or a small group. Where you may be confused is that there is another rule that sounds a lot like this, and it is the large-group employer penalty that says the employer is penalized if the premium is not affordable as based on the same self-only premium. That is one of the penalties that has been delayed, by the way.

 

[Ann H]

Thanks for clearing the glitch thing up. I thought for a second when I red his post I missed something.
One other thing, you say they will have to complete the subsidy app.
How does that work on the phone or in person don't we enter their info for them? Isn't that the first part of the process.

CMS says agents and brokers may assist the client with the subsidy app. It doesn't say you have to. And, technically, the subsidy app must be completed and signed by the applicant. It does, however, have a field for agent/broker number. But since the carriers pay the commission, how much does that field mean?

It is not much different that completion of a medically underwritten app. Many times it says the app must be in the applicant's handwriting, and an agent cannot complete it. You could get into a lot of trouble for telling the client how to answer a question, if that answer was a manipulation, or if you changed the answer to something that you knew the underwriter wanted to hear. But there is nothing wrong with the agent giving guidance to an applicant on answering the question completely, honestly, and with enough detail to give the reader the information that they need in order to complete the decision.

So, likewise with the subsidy app. My suggestion would be to have them complete it themselves as often as you can. For current clients or someone you know very well, you might offer more assistance. You might want to help them understand what income and expenses to include on the app to make sure that the government calculates MAGI income correctly. (Hint: everything on the tax return that comes before line 37 where Adjusted Gross Income is calculated, plus foreign income, tax-free interest and the non-taxed portion of social security benefits). The subsidy app gives a lot of spaces to include lots of kinds of income, but few spaces for deductible expenses. It might be best for them to look at their Federal Form 1040 and see what expenses come before line 37 (AGI). You might want to tell them that "household" means everyone listed on your tax return. And you might want to explain what "eligible for" an employer sponsored plan that is affordable and adequate means. But whether or not you guide them further depends on how comfortable you feel about treading into those waters.

 

[SecureHealth1]

Thanks for clarifying... I would think that once we see carriers e-applications, their may be certain knock out questions or a way to calculate that will determine that for us, which would result in not letting us go any further in the process..

 

[somarco]

Just a wag, but my guess is the carrier app will have a limited number of questions on the subsidy.

Are you eligible? How much? Attach your subsidy application.

 

[SecureHealth1]

Just a wag, but my guess is the carrier app will have a limited number of questions on the subsidy.

Are you eligible? How much? Attach your subsidy application.

I hear ya, I believe miss stated incomes will catch up to a lot of people which is on them, I just keep hearing there is nothing in place to track the the family glitch the first year, and maybe HHS does not care the first year, one more thing to get enrollment up the first year because they are so desperate to get every body and their brothers enrolled..

 

[HealthGuy]

Still unreal to me that the government isnt goin to care if subsidy dollars are scammed...