Update and Gotcha’s!

HIX Update

Since June I cautioned that the HIX would have glitches the first month, so wait until November. This is a case where I do not relish being right. The government that promised to be ready October 1 has promised to be ready November 30. Perhaps. If the number of enrollments that had been expected to take over 10 weeks now will only have 2 weeks, what could go wrong?

So, find an independent broker. More than just access to rates, a broker has access to info not available on the HIX including years of experience.

To see what you’ll need to have handy, download the instructions and application forms from my Home Page.

The short form is if you are on your own and single. Couples and families need the standard form. I provided the non-financial assistance forms; however, applying off the HIX is much simpler, so contact me.

If you want the financial assistance from the government, then you must apply via the HIX. If the site is not working well, then Plan B is to have all your info ready (get the forms so you know what that means) then call 800-318-2596 (en Español: Llame a 800‑318‑2596).

HCR Gotcha’s

Assuming you’re eligible? Better check!

Say Dana Smith is married with kids.  Dana has employer group insurance that meets all the new requirements including that Dana’s portion of the premium is less than 9.5% of the household income (and to be safe, under 9.5% of Dana’s salary).  It does not matter what their household MAGI is.  Say it’s 150% of FPL and on the HIX they’d qualify for a huge premium subsidy, and even cost sharing of medical expenses.  Yet they can’t.  Simply because Dana’s employer offers spouse and dependent coverage, the Smiths are ineligible to use the HIX, consequently they are ineligible for ANY government subsidy or cost sharing.

This is just one major flaw in the law that will create a lot of heartache.  Employees in lower-paying industries will try to get their employer to stop offering coverage for spouses and dependents.  But it won’t always be that simple because of a plethora of other laws on the books.  Many small and medium business owners will be caught between a rock and a hard place.  And, by the way, none of those owners started their business to be in the business of offering health insurance, much less act as an extension of government services.

My child is free, my child costs extra, which is it?

The cost of covering dependents is not as straight-forward as it was.  For dependents under age 21, expect to pay a premium per dependent up to three.  More than that are at no additional premium.  Although dependents may be on a plan until they turn 26, the “free ones” won’t be free when they turn 21. Say you have 4 dependents (spouses are not dependents) and that on January 1, 2014 their ages will be 20, 19, 18, and 17.  Your premiums for 2014 will include incremental costs for three.  Essentially, the fourth child is free.  When your policy renews January 1, 2015, their ages will be 21, 20, 19, 18.  Now the 21-year old incurs an adult premium and you will pay incremental dependent premiums for the other three.

Oh, and in the above example, dependents under age 19 (yes a different age to track), must have “pediatric dental and vision” coverage.  The media have had little to say partly because few understand this.  On the HIX, you’ll see medical plans that include these pediatric benefits built in (more commonly just the Vision), with options to add Dental coverage for just the under-19 dependents, or the whole family.  If you opt not to have this coverage included, you’ll need to attest that you have other dental and vision coverage for your under-19 dependents.

Oh, and your newborn and toddler with no teeth?  Uncle Sam says thou shalt have Dental coverage, since they are under 19.  Clear as mud?

Unintended consequence for the poorest

Reminder – Catastrophic plans are only for people under age 30 or for those who do not qualify for premium subsidies or cost sharing because they are too poor.  Disqualification is not just above 400% FPL, it is also under 100% FPL!  PPACA was written assuming that states would expand Medicaid to impoverished adults.  The Supreme Court struck down that part of the law, making Medicaid Expansion optional.  So if your state is like Idaho in that it has not expanded Medicaid, then the poorest adults are not eligible for subsidies and must pay full price.  The least expensive plans are the Catastrophic ones, sometimes simple referred to as “Covered.”

Paying the piper

Keep April 15, 2015 in mind when estimating your 2014 MAGI.  Government premium subsidies are an “Advanced Premium Tax Credit.”  That means when you file your 2014 tax return in 2015, if your MAGI turned out to be greater than what you estimated when you applied (almost 18 months earlier) then you will owe some of that back.  You might want to slightly over-estimate your MAGI (get a slightly lower subsidy) so the surprise is more likely to be a tax return than a tax bill.