Question from a Client & I'd Like Some Feedback

[RayNY]

https://www.mnsure.org/images/BC3-12-CalculatingAPTC.pdf

Refer to the last step of the process. I'd post the federal guidance indicating that the last check for APTC is "if APTC is greater than premium of chosen plan, APTC is reduced to premium level", but I hope guidance from an exchange is good enough.

 

[cadylou]

I agree RayNY - if they don't explicitly state this, I'm going to be asked this question again. As it is - this gal that asked me is thinking she missed out on some gravy train by choosing the Silver plan that used all of her subsidy. She told me that she should have chosen the bronze "so she could save the extra money" . . . .brother! I told her AGAIN this is not a money making opportunity. Personally, I resent the fact that people like this think people like me should subsidize her new stream of income!

 

[somarco]

The Advance Premium Tax Credit is used to offset premium. Whether you get it as an advance or at tax time is irrelevant.

One could argue the APTC is like EIC which can be taken in advance or refunded when you file your taxes.

I suspect a lot of folks qualifying for APTC are also accustomed to EIC so it is logical to make the leap to "When will I get the rest?".

 

[unic.consulting]

Premium Tax Credits

Insurance premiums are monthly, quarterly or yearly payments to insurance companies for providing insurance. Premium tax credits will help people reduce the amount of money they pay for insurance premiums. To qualify, a person must earn between 100% and 400% of the federal poverty level and buy coverage through a health insurance marketplace, also called an exchange. In 2013, that would mean an income between $11,490 and $45,960 for individuals or between $23,550 and $94,200 for a family of four.

People won't have to wait until they file their taxes to receive a tax credit. The tax credits go straight to the insurance company to lower the premiums by the amount of the tax credit.


You can apply for a tax credit when you enroll through an insurance marketplace. You will need to supply income and employment information to see if you qualify. The marketplace will estimate your tax credit based on the information you provide. The exact amount of your tax credit will depend on your federal income tax return for the year. If your estimate was less than your actual credit, you will receive the balance as a refund. However, if your estimate exceeded your actual credit, you must repay the amount as tax due.

https://www.healthcare.gov/glossary/advanced-premium-tax-credit/

This seems to be clear enough to me that it will help pay for the premium, nothing else. I would just point this sentence to them.

 

[cadylou]

I did - I sent her that verbatim. She still doesn't get it . . . .

 

[unic.consulting]

I did - I sent her that verbatim. She still doesn't get it . . . .

At that point there isn't much more that can be done.

 

[AllenChicago]

I did - I sent her that verbatim. She still doesn't get it . . . .

Millions of people will be able to use the (wink) "honor system" for claiming money and maybe free cellphones, because the BACK END reporting system still hasn't been built. What a hoot.

LINK: Forget Enrollment, There

IRS1040- Did you qualify for a subsidy? Yes___ No____
Tell us how much it was and we'll send It to you.

 

[LGilmore]

hmmm, How it was explained in WA was the subsidy was established at enrollment, then adjusted up or down with income tax reporting. The unused subsidy was applied to the tax return, just as an overused subsidy would be returned from the tax return.

In our meeting they were actually encouraging agents to have people take less subsidy rather than full to allow for income projection errors.

So as it was explained to us up north was if they qualified the subsidy was the insured's to use how they see fit. The could buy up and pay the difference or buy down and bank the difference. They could take all subsidy and apply it to a plan or a portion to a plan and collect the difference on their income taxes.

 

[Yagents]

Yes, but total subsidy will not b more than the premium chosen

 

[RayNY]

Yagents is right:

You may choose to take partial, or no, subsidy in advance, and claim the additional subsidy due at tax time. It's actually not a bad idea for clients that can budget, people are happy to take a bigger bonus!

No matter what you do, subsidy can never be more than the premium, plain and simple.