Q & A

How much are the IRS Penalties for not having coverage?
2015: Greater of $325 per adult and $162.50 per child under age 18 (maximum of $975 per family) or 2% over the tax-filing threshold
2016: Greater of $695 per adult and $347.50 per child under age 18 (maximum of $2,085 per family) or 2.5% over the tax-filing threshold
Beginning 2014, the plans offered on the health insurance exchange are guaranteed issue – which means pre-existing conditions are a thing of the past. Will this also apply to plans offered that are not on the exchange?
Yes – all health insurance, on or off the exchange, will be guaranteed issue beginning January 1, 2014 and all pre-existing conditions will be accepted with no additional charge.
When can an employee receive a premium tax credit?

Premium tax credits generally are available to help pay for coverage for:

  • Employees who are between 100% and 400% of the federal poverty level and enroll in coverage through an Affordable Insurance Exchange.
  • Employees who are not eligible for coverage through a government-sponsored program like Medicaid or CHIP.
  • Employees who are not eligible for coverage offered by an employer or are eligible only for employer coverage that is unaffordable or that does not provide minimum value.
In calculating the advance tax credit, what if we are married and report separate incomes?
The advance tax credit eligibility is based on a married couple’s total income.
What is the penalty for someone who claims more income than they actually achieve? If someone earns an income that qualifies them for Medicaid but they inaccurately predict an income that would qualify for a substantial subsidy, then what is the practical outcome of this error? What is the maximum that someone would be penalized for after overstating their income? I doubt that there would be any practical penalty. Prove me wrong.

In the scenario you describe, you would be liable to repay no more than $300 for the year. The following is a more complete answer to the “claw back” question provided here in October 2013:

The consumer is liable for repayment of any excess tax credit received in the calendar year. However the amount of the “claw back” provision is limited by the household income according to the ACA law. If the household income (expressed as a percent of poverty line) is:

  • Less than 200% FPL, the amount of the claw back is limited to one-half of $600
  • At least 200% FPL but less than 300% FPL, the amount of the claw back is limited to one-half of $1,500
  • At least 300% FPL but less than 400% FPL, the amount of the clawback is limited to one-half of $2,500.
Who can buy coverage in the Marketplace?
Most people can shop for coverage in the Marketplace. To be eligible you must live in the state where your Marketplace is, you must be a citizen of the U.S. or be lawfully present in the U.S., and you must not currently be incarcerated.
Can I buy or change private health plan coverage outside of Open Enrollment?

In general, you can have a special enrollment opportunity to sign up for private, non-group coverage during the year, other than during Open Enrollment period, if you have a qualifying life event. Events that trigger a special enrollment opportunity are:

  • Loss of eligibility for other coverage (for example if you quit your job or were laid off or if your hours were reduced, or if you lose student health coverage when you graduate) Note that loss of eligibility for other coverage because you didn’t pay premiums does not trigger a special enrollment opportunity
  • Gaining a dependent (for example, if you get married or give birth to or adopt a child). Note that pregnancy does NOT trigger a special enrollment opportunity.
  • Loss of coverage due to divorce or legal separation
  • Loss of dependent status (for example, “aging off” a parents’ plan when you turn 26)
  • Moving to another state or within a state if you move outside of your health plan service area
  • Exhaustion of COBRA coverage
  • Losing eligibility for Medicaid or the Children’s Health Insurance Program
  • For people enrolled in a Marketplace plan, income increases or decreases enough to change your eligibility for subsidies
  • Change in immigration status
  • Enrollment or eligibility error made by the Marketplace or another government agency or somebody, such as an assister, acting on their behalf.
  • Note that some triggering events will only qualify you for a special enrollment opportunity in the health insurance Marketplace; they do not apply in the outside market. For example, if you gain citizenship or lawfully present status, the Marketplace must provide you with a special enrollment opportunity.

When you experience a qualifying event, your special enrollment opportunity will last 60 days from the date of that triggering event.

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