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Webinar Q&A: Everything you need to know about Cost Sharing Reductions and Tax Credits in 2018

November 9, 2017

ACE TA Center

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The following questions and answers came from the November 9, 2017 ACE TA Center webinar, Everything you need to know about Cost Sharing Reductions and Tax Credits in 2018.

Questions

  1. If someone makes less than 100% of FPL, are they eligible for Premium Tax Credits (PTCs) and Cost Sharing Reductions (CSRs)?
  2. Have there been any changes to the individual mandate rule this year?
  3. I heard that if someone missed any 2017 premium payments, they may have to pay these unpaid premiums before 2018 coverage can begin. Is that true?
  4. We've been told by insurance agents of one of our major insurance carriers that CSRs are not available for silver plans in 2018. Is this not the case, and CSRs are still available for silver plans?
  5. I have a patient who is opting out of their employer insurance because he only has an income of only $22,000 per year. Can he enroll in the Marketplace and if so, how will he submit the form that was provided to him from his employer to the Marketplace?
  6. What general information can you offer regarding HIV medication tiering for 2018?
  7. What rate do you use to determine if an employer plan is "not affordable"?

Answers

  1. If someone makes less than 100% of FPL, are they eligible for PTCs or CSRs?

    Unfortunately, no. Individuals must be between 100%-400% of the FPL to be eligible for financial assistance through the Marketplace. The only exception is for lawfully present individuals - these individuals can get PTCs/CSRs even if their income is below 100% FPL.  Individuals who are below 100% FPL and ineligible for assistance should check with their case manager, RWHAP program director or state ADAP coordinator to see if they may be eligible for financial assistance through the RWHAP/ADAP program.

    Individuals below 100% FPL may also be eligible for Medicaid depending on the eligibility rules of their state and what their exact income is.
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  2. Have there been any changes to the individual mandate rule this year?
    There have been no changes to the individual mandate rule this year. The individual mandate remains enforced. In fact, the IRS explained that people should continue to indicate on their 2017 tax return whether they were insured last year, or whether they were exempt from the requirement to have health coverage, and whether they owe a penalty for not having coverage. Nothing in terms of the individual mandate enforcement or the requirements has changed, so clients should continue as they did when filing 2016 (last year) in terms of that requirement. In October, the IRS announced it will reject tax returns that do not include information about whether the tax filer has minimum essential coverage: https://www.irs.gov/tax-professionals/aca-information-center-for-tax-professionals
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  3. I heard that if someone missed any 2017 premium payments, they may have to pay these unpaid premiums before 2018 coverage can begin. Is that true?

    Yes - Your client may have to pay their unpaid premiums before their 2018 coverage can begin. As of June, as part of the Market Stabilization Rule, insurers now have the option to require people to pay previously-owed premiums if they want to be enrolled in the same plan, or with the same insurer.

    Insurers aren't required to have this policy, but some may choose to implement it. Your state ADAP or local RWHAP may be able to help your client pay these back premiums, so it's important that you check with a RWHAP program director or State ADAP coordinator to learn more. 
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  4. We've been told by insurance agents of one of our major insurance carriers that CSRs are not available for silver plans in 2018. Is this not the case, and CSRs are still available for silver plans?
    CSRs are still available for 2018 Silver plans. The confusion has to do with how cost-sharing reductions are paid for. The health care law requires insurers to pay for cost-sharing reductions. This means CSRs are still available for 2018, for people below 250% of FPL. This has not changed. What did change is that the federal government will no longer reimburse insurance companies for the cost of these CSR payments.
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  5. I have a patient who is opting out of their employer insurance because he only has an income of only $22,000 per year. Can he enroll in the Marketplace and if so, how will he submit the form that was provided to him from his employer to the Marketplace?
    It depends on if the offer is affordable and meets minimum value. An offer of Employer Sponsored Insurance (ESI) is considered “affordable” if the total amount an individual is expected to spend on premiums for the year is less than 9.56% of their annual income. An offer of ESI must also meet “minimum value,” or cover at least 60% of the cost of medical services. If an offer of ESI is either unaffordable or does not meet minimum value, the employee can be eligible for APTCs/CSRs. To determine whether an offer of ESI is affordable/MV, employees can ask their employer to fill out HealthCare.gov’s Employer Coverage Tool: https://www.healthcare.gov/downloads/employer-coverage-tool.pdf 
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  6. What general information can you offer regarding HIV medication tiering for 2018?
    It’s always important to assess formulary coverage, including tiering, as part of your plan assessment. While we could see some plans that place HIV medications on high tiers with high copayments or coinsurance, it’s important to note that the ACA’s nondiscrimination requirements are still in place. This means that regulators are going to look to see if plans are putting all or substantially all HIV medications on the highest cost sharing tier as a possible indication of a discriminatory plan design. If you’re seeing plans with formularies that don’t cover HIV medications or that place all or most HIV medications on the highest cost sharing tier, you should contact your state insurance commissioner in the department of insurance.
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  7. What rate do you use to determine if an employer plan is "not affordable"?
    The affordability threshold for determining whether an offer of ESI is affordable changes each year, but it is typically between 9-10% of someone’s annual income. In 2018, the affordability threshold is 9.56%. Here’s a good resource for it: http://www.healthreformbeyondthebasics.org/wp-content/uploads/2017/09/Webinar-OE5-2017-09-19_Premium-Tax-Credits.pdf 
    The IRS publishes and updates the affordability threshold in its Publication 974: Premium Tax Credit https://www.irs.gov/pub/irs-pdf/p974.pdf 
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