Next OEP - Clawback / Income Projection NIGHTMARE

[RayNY]

Only time will tell the truth, but I agree with you AC. I think less people than they project will get a bonus (because they're incentivezed to report it mid-year), more people will pay a clawback (because the majority under-estimate to get a bigger subsidy in my experience).

10% being close enough it doesn't matter, or reporting changes mid-year so everything adds up, is probably pretty close to reality.

 

[somarco]

This may have been discussed before, but if I get $400/mo subsidy based on estimates and the actual is a reduction to $300/mo and I owe the govt $1200, do the carriers have to pay back that money as well?

I assume not since (presumably) the subsidy was merely a pass through with Uncle acting as the middle man.

But what about the deductible buy downs? Is there any kind of accounting for these dollars that flow to the carriers?

 

[AllenChicago]

This may have been discussed before,

But what about the deductible buy downs? Is there any kind of accounting for these dollars that flow to the carriers?

I've asked about this 3 times over the past 5 months or so inside various threads, but no responses. I don't think any rules have been formulated for insurers to recapture $$$ from their customers when the customer had claims which surpassed a CSR deductible/OOP which was set too low.

 

[RayNY]

No, carriers aren't on the hook. Solely the insured is responsible for repaying excess APTC.

As for the CSR reduction, we still don't know for sure if these are (1) separate plans (as the separate CSR filings, AV's, and SBC's would imply) or (2) simply the silver with cost sharing subsidized after the fact (not what we presume).

1) Makes more sense, and in that case, no need to repay CSR, as it's simply a different plan design and no money has been transferred. The plan was obtained in error, but the plan is the plan nonetheless.
2) Makes less sense, and would require a lot of behind-the-scenes reconciliation and reporting from all those involved. Realistically speaking, it's impossible considering the sorry state of the back-end. Theoretically, because dollars were paid from the gov't to the carrier in this scenario, CSR clawback may be possible (but no procedure has been released, nor guidance implying CSR is subject to clawback).

TL;DR Carriers aren't on the hook for paying back your subsidies, and CSR isn't subject to clawback (at least yet, referencing the guidance released thus far)

 

[Ann H]

Correct, RayNY. Clawback of the APTC is between the member and the IRS. I have read nothing so far that says there is any clawback for the cost reductions in a CSR plan.

 

[AllenChicago]

1-27-2015

Talked to a client this morning who enrolled in a 2014 subsidized plan. Marketplace sent him a complicated self-employed "prove your income" form. He threw it out. Marketplace cancelled his coverage at end of 2014. He enrolled off-exchange in a 2015 plan. Had to repay the $5,200 2014 subsidy received.

End result: He's VERY relieved and elated to be a free man again!

ac

 

[bobson]

1-27-2015

Talked to a client this morning who enrolled in a 2014 subsidized plan. Marketplace sent him a complicated self-employed "prove your income" form. He threw it out. Marketplace cancelled his coverage at end of 2014. He enrolled off-exchange in a 2015 plan. Had to repay the $5,200 2014 subsidy received.

End result: He's VERY relieved and elated to be a free man again!

ac

Tell him congratulations! That $5200 should be easy to come up with. Think of the good he'll do for government coffers too.

 

[AllenChicago]

This brief article describes how the IRS will waive two penalties for Self-Employed individuals who received too large of an Advance Premium Tax Credit in 2014, because they under-estimated their income.

Ref: Obamacare Penalty: Relief From The IRS - Forbes

Is this a big deal for the self-employed who have an APTC clawback?
ac

 

[AllenChicago]

2-24-2015

Tax Season interim numbers from H&R Block:

1. 52% of 2014 subsidy recipients have to repay some of the APTC (clawback).
2. The average repayment is $530.
3. Average Penalty-Tax payment for not having health insurance in 2014 is $172.

Source: Surprise: Poorest Obamacare Enrollees Face $530 IRS Tax Bill | Americans for Tax Reform
ac

 

[VolAgent]

2-24-2015

Tax Season interim numbers from H&R Block:

1. 52% of 2014 subsidy recipients have to repay some of the APTC (clawback).
2. The average repayment is $530.
3. Average Penalty-Tax payment for not having health insurance in 2014 is $172.

Source: Surprise: Poorest Obamacare Enrollees Face $530 IRS Tax Bill | Americans for Tax Reform
ac

The people who have filed by now will predominately be receiving refunds. It will be interesting to see more final numbers after April 15th.