Subsidy Clarification Questions

[SecureHealth1]

I have two questions on subsidies.

Lets say I have a family of four on an individual plan today, will they be able to get a subsidy when Reform kicks in?

Same scenario, but that family is currently covered on a group plan.

 

[AllenChicago]

I have two questions on subsidies.

Lets say I have a family of four on an individual plan today, will they be able to get a subsidy when Reform kicks in?

Possibly. See: Health Reform Subsidy Calculator - Kaiser Health Reform


Same scenario, but that family is currently covered on a group plan.

Probably not..unless the group plan is charging them more than 9.5% of the family income? This question is more murky for me. We'll have to let some of our forum experts chime in. You could probably find other discussions about the Group Coverage/Subsidy issue in some of the other forum threads.

-ac

 

[SecureHealth1]

I read that as well on the group side, haven't been able to find anything on the individual side..

 

[Ann H]

I have two questions on subsidies.

Lets say I have a family of four on an individual plan today, will they be able to get a subsidy when Reform kicks in?

Same scenario, but that family is currently covered on a group plan.

Let me start with the first part of your question that did NOT have to do with a group plan.

If your family MAGI (modified adjusted gross income) is less than 400% of the Federal Poverty Level, and if you are not eligible for another qualified government plan like Medicare, Medicaid, VA, etc., then you qualify for a subsidy. It has nothing to do with the affordability of the current individual/family plan that you may currently hold. The subsidy is supposed to pay the premium that exceeds 2% to 9.5% (graded based on income) of your family income. That premium is based on the 2nd lowest cost Silver plan. So, of course, if the premium for the 2nd lowest cost Silver plan is less than 9.5% (graded) of your income, then you lose the subsidy.

Now, for the group question..... We are waiting on clarification from several sources. It is possible that the answer is one of the following:

1. If the group plan is "affordable" for the employee-only, then nobody in the family qualifies for a subsidy
2. If the group plan is "affordable" for the employee, then the employee & children will not qualify for a subsidy, but the spouse might.
3. The group plan must be "affordable" for the employee AND family members or else subsidies will be offered to the employee and/or family members for whom the group plan was not affordable.​

The "affordability test" is similar to the one above where the premium must be less than 2% to 9.5% (graded) of family income.

 

[SecureHealth1]

Thanks Ann for your response.

The main reason I am asking about individual is I was told that if you have ANY other coverage in place, you would not get a subsidy which I find hard to believe. I am trying to understand what will happen to my current book of individual clients once this takes place??

 

[Yagents]

Thanks Ann for your response.

The main reason I am asking about individual is I was told that if you have ANY other coverage in place, you would not get a subsidy which I find hard to believe. I am trying to understand what will happen to my current book of individual clients once this takes place??

That question has a whole different answer.

You possibly have two types of clients on the books:

Grandfathered clients: After seeing the calculator from Berkely that I believe Allen posted, it's going to be crucial that people who are grandfathered keep their plan if they are higher income (above 400% FPL). These should stay on the books for at least a couple years, if you educate them now and when the exchanges launch.

Non grandfathered clients: will be required to adhere to O'care mandates, and the policies will probably blow up. You need to stay in front of these clients, to roll them to the exchange, and keep them on the books.

Anyone run numbers yet on that calculator. If family of 4, age 40, making $92,000 a year, they get a $3600 annual subsidy. If they make $93,000 a year, they get nothing. NET NET, make an extra grand, lose $2600. People are going to be begging not to get a raise. Voters will be wishing they could go back in a time machine....say to Nov 6th

 

[SecureHealth1]

100% of by book is Non grandfathered plans...