Penalties Will Crush Short Term Plans in 2016

[infoseeker]

With penalties reaching almost $700 per adult and $2085 per family in 2016 short term plans will no longer present a bargain it seems . there will be no place for short terms plans no niche or market since everyone is mandated to have essential coverage. Unless im missing something here.

 

[timsip]

I don't think it will be much of a stretch to have STM premiums be more than $60 per month cheaper than ACA plans....and from what I am seeing the coverage actually might be better with STM if able to pass underwriting.

 

[AllenChicago]

STM pays well on injury but rarely pays for sickness. We've Got a E&O claim, Dept of Insurance Investigation and an Attorney sharpening his sword to carve up a poor guy at our agency right now.

After 15 million Americans start experiencing how the ACA screws with their tax returns this Spring there will be a huge outcry, and demands for the new Congress to take some kind of action. There's no doubt about it.
ac

 

[tonyisme]

Yes thought i might qualify for a non aca compliant international major medical plan but my $60 phone call to my excellent cpa set me straight and warned me about these new notices the carriers must send out to their insureds..to file with their 2014 returns. The notice will also be sent to IRS.
I am not a tax expert or tax knowlegable but
He refered me to what this article below discusses. So start writing your politicians.

http://www.nerdwallet.com/blog/health/2014/08/29/obamacare-2014-taxes/

New Tax Forms

The first major change on 2014 tax returns will be the requirement that you report your health insurance status when you file. For most, this will be a simple process, as you will receive the necessary forms in the mail, similarly to how you receive a W-2 from your employer. In July, the IRS issued drafts of these forms, known as the 1095A, 1095B and 1095C.

Form 1095-A: If you purchased health insurance through your state exchange or the federal Marketplace, you will receive this form indicating your coverage.

Form 1095-B: This form will come directly from the health insurance company if you sought private insurance outside of the state exchanges.

Form 1095-C: If your employer furnishes your health insurance, it will provide you with a 1095-C indicating your coverage.

The appropriate 1095 form will come to you, and employers and insurance companies will file other versions (1094 forms) directly with the IRS. These will serve as your proof of coverage and you will put information from them onto your Form 1040.

 

[Lakshmi]

I've come across agents out in the field (by way of talking to prospects), that are misleading them into believing that indemnity plans are a good option to stay out of ACA/Marketplace plans. I do foresee this becoming a problem. SMH.

Not sure this is a good place to put this info, but it does somewhat fall in line. Although, I do realize short term is not the same as indemnity, but I do see fellow agents making it seem as so.

 

[AllenChicago]

I've come across agents out in the field (by way of talking to prospects), that are misleading them into believing that indemnity plans are a good option to stay out of ACA/Marketplace plans. I do foresee this becoming a problem. SMH.

Not sure this is a good place to put this info, but it does somewhat fall in line. Although, I do realize short term is not the same as indemnity, but I do see fellow agents making it seem as so.

In the IRS's eyes, Short Term is the same as Indemnity. Neither qualify as Minimum Essential Coverage. Therefore, both subject the owner to the IRS penalty-tax.

Infoseeker (the thread starter) is correct. For peace-of-mind, Major Medical has always been preferable to STM and Indemnity plans. Now, STM and Indemnity carrier greed is making the 12 month plans so expensive, that when you add the penalty-tax to the premium, their financial advantage over major medical has almost evaporated.

 

[houcoogster]

In the IRS's eyes, Short Term is the same as Indemnity. Neither qualify as Minimum Essential Coverage. Therefore, both subject the owner to the IRS penalty-tax.

Infoseeker (the thread starter) is correct. For peace-of-mind, Major Medical has always been preferable to STM and Indemnity plans. Now, STM and Indemnity carrier greed is making the 12 month plans so expensive, that when you add the penalty-tax to the premium, their financial advantage over major medical has almost evaporated.

Hmmm wonder how that happened?................

 

[tonyisme]

Can you imagine if Mr and Mrs client fails to receive their 1095 form to mail in with their 2014 tax returns?? Or it gets lost in the mail? OR they just forgot? Ouch ! Mr Penalty bites hard and they will probably be calling their agent or "navigator" to blame someone. :O

 

[yankee466]

STM question:

How many months can you go without an ACA compliant plan before you are subject to penalty? My quick reading seems to show 3 continuous months.

If open enrollment goes until Feb 2015....and you get an ACA plan starting in March......what would be the issue of getting a quality STM plan (lets say from Assurant, where essentially EVERYTHING you need is 100% covered for Jan & Feb), and then you delay ACA sign up until March 1st. Obviously there is a pre-ex clause......no maternity, and no wellness for that time....but if the answer is "who cares"...where is the problem? You are guaranteed covered on March 1st...and the STM offers lower deductible coverage than most ObamaCare plans.

What am I missing in this logic?

Not sure why others bash STM plans if they are decent ones like Assurant....as opposed to crappy ones like HCC or UHC. Accident and illness, and Rx, is fully covered...and you can even check a box with Assurant to cover the deductible for accident to make it even stronger.

I am looking at some of my healthy clients with pre-ACA plans being cancelled at the end of this year...not subsidy eligble, and with premiums being trippled. A STM would at least save them tons of money for two months with no risk of not getting an ACA plan in March if they developed a pre-ex.



Thanks

 

[AllenChicago]

Why just do a 2 month STM is the optional penalty-tax is far lower than the annual premium for an Obamacare plan? This isn't advice, just a question.