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Author: Hummingbird Insurance

Can I be charged higher premiums in the Marketplace if I smoke?

Written by Hummingbird Insurance on . Posted in Frequently Asked Questions.

In most states, yes. Generally, an insurer can charge as much as 50% more for a person who uses tobacco products. For example, if the premium for somebody your age (before any tax credits are applied) would otherwise be $200 per month, if you are a tobacco user your premium could be increased to $300 per month. States can prohibit insurers from applying a tobacco surcharge or further limit the tobacco penalty and some have done so. (For example, California, Massachusetts, Rhode Island, Vermont and the District of Columbia prohibit tobacco rating for their Marketplace plans.] Also, some insurers who do charge more for tobacco users are charging the less than maximum amount they can under the law. Check with your state Marketplace to learn more about tobacco surcharges and how they work.

If you qualify for premium tax credits to reduce the cost of Marketplace coverage, this tax credit amount will be based on the premium before the tobacco surcharge is applied, which means that a smoker must pay the full cost of the surcharge.

I enrolled in a Marketplace policy with premium tax credits in 2018, even though my employer offers health benefits, because the employer coverage was unaffordable (more than 9.56% of my income in 2018). Then mid-year I started a second part-time job. As a result my annual income will be higher than I originally estimated, and, at this higher income, the cost of enrolling in my job-based plan would be less than 9.56% of my income. Unfortunately, I can’t sign up for my employer plan until the next open season. What should I do? When I file my taxes will I be required to pay back my premium tax credits because I had access to affordable job-based coverage after all?

Written by Hummingbird Insurance on . Posted in Frequently Asked Questions.

First, you should report your income change to the Marketplace. The Marketplace will determine your new eligibility for premium tax credits, based on your higher income, and adjust the level of subsidy going forward. If you make this adjustment promptly, it’s likely you won’t receive any more advanced premium tax credit during the entire year than you’re eligible for based on your annual income.

As for the new “affordability” of your job-based coverage option, that won’t be taken into account when you file your taxes. As long as the Marketplace determined you were not eligible for affordable job-based coverage when you initially applied for Marketplace coverage and subsidies, that determination will hold for the remainder of the year. The IRS refers to this as a “safe harbor,” and won’t require you to go back and re-compute the affordability of your job-based coverage at year end when you file your taxes.

How often during the year can I adjust my premium tax credit amount? What documentation is required to make an adjustment? How long after I request the adjustment will it take effect?

Written by Hummingbird Insurance on . Posted in Frequently Asked Questions.

There is no limit to the number of times a person may report income, family or insurance-eligibility changes to the Marketplace. Changes that are reported by enrollees will be verified by the Marketplace. Then the Marketplace will send you a notice (called a redetermination notice) showing your revised eligibility for premium tax credits and cost-sharing reductions. In addition, people can always ask the Marketplace to provide them with a monthly advance premium credit below the amount the Marketplace determines based on the household’s income if they want to minimize the chance of needing to owe money at the end of the year.

The adjustment will take effect by the first day of the month following the date of the redetermination notice. For example, if an enrollee reports a change in income on June 25 and the Marketplace verifies the change and sends a redetermination notice to the enrollee on July 3, the change will be implemented on August 1.

I live in a state that has chosen not to expand Medicaid. When I applied for Marketplace coverage, my income was just above the poverty level, so I applied for and received an advance premium tax credit. What happens if I lose my job toward the end of the year so my annual income will be just under the poverty level? Will I have to pay back the advanced subsidies I’ve received?

Written by Hummingbird Insurance on . Posted in Frequently Asked Questions.

No.  If you were determined eligible for subsidies when you signed up, and your income turns out to be lower, you will not have to repay the subsidies you received.

If I request an adjustment in my Marketplace premium subsidy, how long before that takes effect?

Written by Hummingbird Insurance on . Posted in Frequently Asked Questions.

The adjustment will take effect by the first day of the month following the date of the redetermination notice. For example, if an enrollee reports a change in income on June 25 and the Marketplace verifies the change and sends a redetermination notice to the enrollee on July 3, the change will be implemented on August 1.

Can I adjust the level of subsidy I collect in advance during the year when my income goes up or down? How often during the year can I make adjustments?

Written by Hummingbird Insurance on . Posted in Frequently Asked Questions.

Yes, you can make adjustments during the year whenever you need to. There is no limit to the number of times a person may report income, family or insurance-eligibility changes to the Marketplace. Changes that are reported by enrollees will be verified by the Marketplace. Then the Marketplace will send you a notice (called a redetermination notice) showing your revised eligibility for premium tax credits and cost-sharing reductions. In addition, people can always ask the Marketplace to provide them with a monthly advance premium credit below the amount the Marketplace determines based on the household’s income if they want to minimize the chance of owing money at the end of the year.

My income is uneven during the year. Some months I don’t earn anything, other months are better. I’m pretty sure my income for the coming year will be less than 400% of the FPL so I’d like to apply for premium subsidies. But what if I’m wrong and my income ends up being more than 400% FPL?

Written by Hummingbird Insurance on . Posted in Frequently Asked Questions.

It’s common for income to fluctuate, particularly if you are self-employed, perform seasonal work or have multiple jobs. To achieve the most accurate premium tax credit amount, you should report income changes to the health insurance Marketplace during the year, as they happen. Otherwise, if you claim a premium tax credit during the year and your actual income for the entire year edges over 400% FPL, you will need to pay back the full credit amount. To avoid this result, if you estimate your annual income will be close to 400% FPL, you could also consider waiting until you file your taxes to take all or a portion of the premium tax credit on your tax return instead of receiving advance payments.

I am self-employed with uneven income. When I applied for premium tax credits during Open Enrollment, I said I expect to earn much less next year than I did last year. The Marketplace said I must provide more documentation but didn’t say what to send. How can I find out?

Written by Hummingbird Insurance on . Posted in Frequently Asked Questions.

Unfortunately, in most states so far, the data match inconsistency notices are not very specific in describing the additional documentation that is required.  Instead, notices list generic types of types of income documentation without specifying the documentation appropriate for you.  If you are self-employed and estimate your income next year will be significantly less than what you reported on your most recent tax return, you should provide copies of any documents that support your estimate.  Make sure to provide copies and not original documents.  If you don’t have documents, a signed statement explaining your estimate may be accepted.  Be sure to include your name and ID number, a description of the income you expect to earn next year, a description of how you arrived at your estimated income amount, and an explanation of why other documentation is not available.

My income is uneven and hard to predict because I am self-employed. Most years I make between $20,000 and $30,000, though two years ago I did especially well and earned $35,000. How will this affect my application for premium tax credits for the coming year?

Written by Hummingbird Insurance on . Posted in Frequently Asked Questions.

In reviewing your application, the Marketplace will compare the amount of income you estimate for next year to the most recent information about your income that is available (usually, that will be the tax return you filed this year reporting last year’s income.)  Generally, if that amount differs from the amount you put on your application by more than 25% or $6,000 (whichever is greater), you might receive a data match inconsistency notice from the Marketplace and you’ll need to provide more documentation.

In cases of an income data match inconsistency, the Marketplace will ask you to provide documentation within 90 days.  During that period, you can get premium tax credits based on the income you attested to in your application.  However, if you have not resolved the data match inconsistency within 90 days, the Marketplace will adjust or end your advance premium tax credit based on the most recent income information it can find.