Viewing posts from: August 2013

IRS Issues Final Rule on the Individual Mandate

Posted August 30, 2013 by PHaynes

On August 27, the Internal Revenue Service (IRS) issued a final rule for the individual mandate provision of the Patient Protection and Affordable Care Act (PPACA).

As a reminder, the individual mandate requires most individuals to have minimum essential coverage (MEC) in 2014 or pay a penalty. The penalty is called a shared responsibility payment. Some individuals may qualify for an exemption from the mandate so they will not be required to have coverage or pay a penalty. An individual seeking an exemption may do so in advance through an application submitted to the Exchange/Marketplace or after the fact with the IRS through the tax filing process. An applicant can apply for multiple exemptions simultaneously.

The final rule, which is largely consistent with the proposed regulations, confirms the following:

  1. What qualifies as minimum essential coverage
  2. What wasn’t addressed in regard to minimum essential coverage
  3. Who is exempt from paying the penalty
  4. How penalties will be determined and paid

1. What Qualifies as Minimum Essential Coverage

An individual is considered to have minimum essential coverage for any month in which he or she is enrolled in one of the following types of coverage for at least one day. Changes from the proposed rule are noted in italics.

  • An employer-sponsored group health plan offered in a state, which is defined as the 50 states plus the District of Columbia. This includes plans offered by, or on behalf of, an employer to an employee, e.g. multiemployer plans, single employer collectively bargained plans, plans sponsored by third parties such as professional employer organizations, temporary staffing agency, etc.
  • An individual health insurance policy offered in the individual market in a state or through an Exchange/Marketplace in a territory.
  • A government plan such as Medicare, Medicaid, Children’s Health Insurance Program (CHIP), TRICARE (a U.S. Department of Defense Military Health System) or veterans coverage
  • Insured student health coverage
  • Self-insured student health coverage*
  • Medicare Advantage plan
  • State high risk pool coverage*
  • Coverage for non-U.S. citizens provided by another country**
  • Refugee medical assistance provided by the Administration for Children and Families
  • Coverage for AmeriCorp volunteers**

*Designated as minimum essential coverage for plan/policy years beginning on or before December 31, 2014. For coverage beginning after December 31, 2014, sponsors of high risk pool or self-funded student health coverage may apply to be recognized as providing minimum essential coverage.

**Coverage provided by another country and coverage for AmeriCorps volunteers are no longer automatically deemed minimum essential coverage. However, individuals may apply to have their coverage recognized as minimum essential coverage.

2. What Wasn’t Addressed in Regard to Minimum Essential Coverage

The final rule does not specifically address arrangements in which an employer provides subsidies or funds a pre-tax arrangement (e.g., a stand-alone Health Reimbursement Account) for employees to purchase a plan in the individual market. The final rule also doesn’t address wellness incentives. These issues will be addressed in future guidance.

3. Who is Exempt from Paying the Penalty

The final rule confirmed the broad exemption categories, including a few changes in italics.

  • Individuals who cannot afford coverage
  • Taxpayers with income below the tax filing threshold. A taxpayer is not required to file a federal income tax return solely to claim the exemption, and may apply for exemption via the Exchange/Marketplace.
  • Individuals who qualify for a hardship exemption
  • Individuals who have a gap in minimum essential coverage of less than three consecutive months in a calendar year, with the continuous period beginning no earlier than January 1, 2014
  • Members of religious groups that object to coverage on religious principles
  • Members of health care sharing ministries
  • Individuals in prison
  • Individuals who are not U.S. citizens and not lawfully present in the United States as defined by Health and Human Services
  • U.S. citizens residing in a foreign country who meet certain IRS tests
  • Individuals who are not members of a federally recognized Native American tribe, but who are eligible for services from the federal Indian Health Service

 4. How Penalties will be Determined and Paid

The first penalties will be due when individuals file their 2014 tax returns in 2015. A penalty is the greater of either a specified dollar amount or percentage of income. The annual penalties for 2014 through 2016 are noted below. Beginning in 2017, penalties will increase based on the cost of living.

  • 2014: Greater of $95 per adult and $47.50 per child under age 18, maximum of $285 per family, or 1% of income over the tax-filing threshold.
  • 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.

If the penalty applies for less than a full calendar year, the penalty will be 1/12 of the annual amount per month without coverage.

Links

Tax Answers to FAQs for Same-Sex Spouses

Posted August 30, 2013 by PHaynes

You may have read our prior news article DOMA Unconstitutional: What’s Next for my Employee Benefit Plans?  And, you’ve thought through the issues about eligiblity for you health plans, spousal life insurance plans, etc.

Now, the IRS has responded with questions and answers that should provide individuals of the same sex, who are lawfully married under state law, with details about how the Supreme Court’s Windsor-ruling will affect them.

Answers to FAQs for Individuals of the Same Sex Who Are Married Under State Law

The following questions and answers provide information to individuals of the same sex who are lawfully married (same-sex spouses). These questions and answers reflect the holdings in Revenue Ruling 2013-17 in IRB 2013-38.

Q1. When are individuals of the same sex lawfully married for federal tax purposes?

A1. For federal tax purposes, the IRS looks to state or foreign law to determine whether individuals are married. The IRS has a general rule recognizing a marriage of same-sex spouses that was validly entered into in a domestic or foreign jurisdiction whose laws authorize the marriage of two individuals of the same sex even if the married couple resides in a domestic or foreign jurisdiction that does not recognize the validity of same-sex marriages.

Q2. Can same-sex spouses file federal tax returns using a married filing jointly or married filing separately status?

A2. Yes. For tax year 2013 and going forward, same-sex spouses generally must file using a married filing separately or jointly filing status. For tax year 2012 and all prior years, same-sex spouses who file an original tax return on or after Sept. 16, 2013 (the effective date of Rev. Rul. 2013-17), generally must file using a married filing separately or jointly filing status. For tax year 2012, same-sex spouses who filed their tax return before Sept. 16, 2013, may choose (but are not required) to amend their federal tax returns to file using married filing separately or jointly filing status. For tax years 2011 and earlier, same-sex spouses who filed their tax returns timely may choose (but are not required) to amend their federal tax returns to file using married filing separately or jointly filing status provided the period of limitations for amending the return has not expired. A taxpayer generally may file a claim for refund for three years from the date the return was filed or two years from the date the tax was paid, whichever is later. For information on filing an amended return, go to Tax Topic 308, Amended Returns, at http://www.irs.gov/taxtopics/tc308.html.

Q3. Can a taxpayer and his or her same-sex spouse file a joint return if they were married in a state that recognizes same-sex marriages but they live in a state that does not recognize their marriage?

A3. Yes. For federal tax purposes, the Service has a general rule recognizing a marriage of same-sex individuals that was validly entered into in a domestic or foreign jurisdiction whose laws authorize the marriage of two individuals of the same sex even if the married couple resides in a domestic or foreign jurisdiction that does not recognize the validity of same-sex marriages. The rules for using a married filing jointly or married filing separately status described in Q&A #2 apply to these married individuals.

Q4. Can a taxpayer’s same-sex spouse be a dependent of the taxpayer?

A4. No. A taxpayer’s spouse cannot be a dependent of the taxpayer.

Q5. Can a same-sex spouse file using head of household filing status?

A5. A taxpayer who is married cannot file using head of household filing status. However, a married taxpayer may be considered unmarried and may use the head-of-household filing status if the taxpayer lives apart from his or her spouse for the last 6 months of the taxable year and provides more than half the cost of maintaining a household that is the principal place of abode of the taxpayer’s dependent child for more than half of the year. See Publication 501 for more details.

Q6. If same-sex spouses (who file using the married filing separately status) have a child, which parent may claim the child as a dependent?

A6. If a child is a qualifying child under section 152(c) of both parents who are spouses (who file using the married filing separate status), either parent, but not both, may claim a dependency deduction for the qualifying child. If both parents claim a dependency deduction for the child on their income tax returns, the IRS will treat the child as the qualifying child of the parent with whom the child resides for the longer period of time during the taxable year. If the child resides with each parent for the same amount of time during the taxable year, the IRS will treat the child as the qualifying child of the parent with the higher adjusted gross income.

Q7. Can a same-sex spouse itemize deductions if his or her spouse claims a standard deduction? 

A7. No. The law prohibits one spouse from itemizing deductions if the other spouse claims the standard deduction (section 63(c)(6)(A)).

Q8. If a taxpayer adopts the child of his or her same-sex spouse as a second parent or co-parent, may the taxpayer (“adopting parent”) claim the adoption credit for the qualifying adoption expenses he or she pays or incurs to adopt the child?

A8. No. The adopting parent may not claim an adoption credit. A taxpayer may not claim an adoption credit for expenses incurred in adopting the child of the taxpayer’s spouse (section 23).

Q9. Do provisions of the federal tax law such as section 66 (treatment of community income) and section 469(i)(5) ($25,000 offset for passive activity losses for rental real estate activities) apply to same-sex spouses?

A9. Yes. Like other provisions of the federal tax law that apply to married taxpayers, section 66 and section 469(i)(5) apply to same-sex spouses because same-sex spouses are married for all federal tax purposes.

Q10. If an employer provided health coverage for an employee’s same-sex spouse and included the value of that coverage in the employee’s gross income, can the employee file an amended Form 1040 reflecting the employee’s status as a married individual to recover federal income tax paid on the value of the health coverage of the employee’s spouse?

A10. Yes, for all years for which the period of limitations for filing a claim for refund is open. Generally, a taxpayer may file a claim for refund for three years from the date the return was filed or two years from the date the tax was paid, whichever is later. If an employer provided health coverage for an employee’s same-sex spouse, the employee may claim a refund of income taxes paid on the value of coverage that would have been excluded from income had the employee’s spouse been recognized as the employee’s legal spouse for tax purposes. This claim for a refund generally would be made through the filing of an amended Form 1040. For information on filing an amended return, go to Tax Topic 308, Amended Returns, at http://www.irs.gov/taxtopics/tc308.html.

For a discussion regarding refunds of social security and Medicare taxes, see Q&A #12.

Example. Employer sponsors a group health plan covering eligible employees and their dependents and spouses (including same-sex spouses). Fifty percent of the cost of health coverage elected by employees is paid by Employer. Employee A was married to same-sex Spouse B at all times during 2012. Employee A elected coverage for Spouse B through Employer’s group health plan beginning Jan. 1, 2012. The value of the employer-funded portion of Spouse B’s health coverage was $250 per month.

The amount in Box 1, “Wages, tips, other compensation,” of the 2012 Form W-2 provided by Employer to Employee A included $3,000 ($250 per month x 12 months) of income reflecting the value of employer-funded health coverage provided to Spouse B. Employee A filed Form 1040 for the 2012 taxable year reflecting the Box 1 amount reported on Form W-2.

Employee A may file an amended Form 1040 for the 2012 taxable year excluding the value of Spouse B’s employer-funded health coverage ($3,000) from gross income.

Q11. If an employer sponsored a cafeteria plan that allowed employees to pay premiums for health coverage on a pre-tax basis, can a participating employee file an amended return to recover income taxes paid on premiums that the employee paid on an after-tax basis for the health coverage of the employee’s same-sex spouse?

A11. Yes, for all years for which the period of limitations for filing a claim for refund is open. Generally, a taxpayer may file a claim for refund for three years from the date the return was filed or two years from the date the tax was paid, whichever is later. If an employer sponsored a cafeteria plan under which an employee elected to pay for health coverage for the employee on a pre-tax basis, and if the employee purchased coverage on an after-tax basis for the employee’s same-sex spouse under the employer’s health plan, the employee may claim a refund of income taxes paid on the premiums for the coverage of the employee’s spouse. This claim for a refund generally would be made through the filing of an amended Form 1040. For information on filing an amended return, go to Tax Topic 308, Amended Returns, at http://www.irs.gov/taxtopics/tc308.html. For a discussion regarding refunds of social security and Medicare taxes, see Q&A #12.

Example. Employer sponsors a group health plan as part of a cafeteria plan with a calendar year plan year.  The full cost of spousal and dependent coverage is paid by the employees.  In the open enrollment period for the 2012 plan year, Employee C elected to purchase self-only health coverage through salary reduction under Employer’s cafeteria plan. On March 1, 2012, Employee C was married to same-sex spouse D. Employee C purchased health coverage for Spouse D through Employer’s group health plan beginning March 1, 2012. The premium paid by Employee C for Spouse D’s health coverage was $500 per month.

The amount in Box 1, “Wages, tips, other compensation,” of the 2012 Form W-2 provided by Employer to Employee C included the $5,000 ($500 per month x 10 months) of premiums paid by Employee C for Spouse D’s health coverage. Employee C filed Form 1040 for the 2012 taxable year reflecting the Box 1 amount reported on Form W-2.

Employee C’s salary reduction election is treated as including the value of the same-sex spousal coverage purchased for Spouse D. Employee C may file an amended Form 1040 for the 2012 taxable year excluding the premiums paid for Spouse D’s health coverage ($5,000) from gross income.

Q12. In the situations described in FAQ #10 and FAQ #11, may the employer claim a refund for the social security taxes and Medicare taxes paid on the benefits? 

A12. Yes. If the period of limitations for filing a claim for refund is open, the employer may claim a refund of, or make an adjustment for, any excess social security taxes and Medicare taxes paid. The requirements for filing a claim for refund or for making an adjustment for an overpayment of the employer and employee portions of social security and Medicare taxes can be found in the Instructions for Form 941-X, Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund. A special administrative procedure for employers to file claims for refunds or make adjustments for excess social security taxes and Medicare taxes paid on same-sex spouse benefits will be provided in forthcoming guidance to be issued by the IRS in the near future.

Q13. In the situations described in Q&A #10 and Q&A #11, may the employer claim a refund or make an adjustment of income tax withholding that was withheld from the employee with respect to the benefits in prior years? 

A13. No. Claims for refunds of overwithheld income tax for prior years cannot be made by employers. The employee may file for any refund of income tax due for prior years on Form 1040X, provided the period of limitations for claiming a refund has not expired. See Q&A #10 and Q&A #11. Employers may make adjustments for income tax withholding that was overwithheld from an employee in the current year provided the employer has repaid or reimbursed the employee for the overwithheld income tax before the end of the calendar year.

Q14. If an employer cannot locate a former employee with a same-sex spouse who received the benefits described in Q&A #10 and Q&A #11, may the employer still claim a refund of the employer portion of the social security and Medicare taxes on the benefits?

A14. Yes, if the employer makes reasonable attempts to locate an employee who received the benefits described in Q&A #10 and Q&A #11 that were treated as wages but the employer is unable to locate the employee, the employer can claim a refund of the employer portion of Social Security and Medicare taxes, but not the employee portion. Also, if an employee is notified and given the opportunity to participate in the claim for refund of Social Security and Medicare taxes but declines in writing, the employer can claim a refund of the employer portion of the taxes, but not the employee portion. Employers can use the special administrative procedure that will be set forth in forthcoming guidance to file these claims.

Q15. If a sole proprietor employs his or her same-sex spouse in his or her business, can the sole proprietor get a refund of Social Security, Medicare and FUTA taxes on the wages that the sole proprietor paid to the same-sex spouse as an employee in the business? 

A15. Yes, services performed by an employee in the employ of his or her spouse are excluded from the definition of employment for purposes of Social Security, Medicare and FUTA taxes. Therefore, for all years for which the period of limitations is open, the sole proprietor can claim a refund of the Social Security, Medicare and FUTA taxes paid on the compensation that the sole proprietor paid his or her same-sex spouse as an employee in the business.

Q16.  What rules apply to qualified retirement plans pursuant to Rev. Rul. 2013-17?

A16. Qualified retirement plans are required to comply with the following rules pursuant to Rev. Rul. 2013-17:

  1. A qualified retirement plan must treat a same-sex spouse as a spouse for purposes of satisfying the federal tax laws relating to qualified retirement plans.
  2. For purposes of satisfying the federal tax laws relating to qualified retirement plans, a qualified retirement plan must recognize a same-sex marriage that was validly entered into in a jurisdiction whose laws authorize the marriage, even if the married couple lives in a domestic or foreign jurisdiction that does not recognize the validity of same-sex marriages.
  3. A person who is in a registered domestic partnership or civil union is not  considered to be a spouse for purposes of applying the federal tax law requirements relating to qualified retirement plans, regardless of whether that person’s partner is of the opposite or same sex.

Q17. What are some examples of the consequences of these rules for qualified retirement plans?

A17. The following are some examples of the consequences of these rules:

  1. Plan A, a qualified defined benefit plan, is maintained by Employer X, which operates only in a state that does not recognize same-sex marriages. Nonetheless, Plan A must treat a participant who is married to a spouse of the same sex under the laws of a different jurisdiction as married for purposes of applying the qualification requirements that relate to spouses.
  2. Plan B is a qualified defined contribution plan and provides that the participant’s account must be paid to the participant’s spouse upon the participant’s death unless the spouse consents to a different beneficiary.  Plan B does not provide for any annuity forms of distribution. Plan B must pay this death benefit to the same-sex surviving spouse of any deceased participant. Plan B is not required to provide this death benefit to a surviving registered domestic partner of a deceased participant. However, Plan B is allowed to make a participant’s registered domestic partner the default beneficiary who will receive the death benefit unless the participant chooses a different beneficiary.

Q18. As of when do the rules of Rev. Rul. 2013-17 apply to qualified retirement plans?

A18. Qualified retirement plans must comply with these rules as of Sept. 16, 2013. Although Rev. Rul. 2013-17 allows taxpayers to file amended returns that relate to prior periods in reliance on the rules in Rev. Rul. 2013-17 with respect to many matters, this rule does not extend to matters relating to qualified retirement plans. The IRS has not yet provided guidance regarding the application of Windsor and these rules to qualified retirement plans with respect to periods before Sept. 16, 2013.

Q19. Will the IRS issue further guidance on how qualified retirement plans and other tax-favored retirement arrangements must comply with Windsor and Rev. Rul. 2013-17?

A19. The IRS intends to issue further guidance on how qualified retirement plans and other tax-favored retirement arrangements must comply with Windsor and Rev. Rul. 2013-17.  It is expected that future guidance will address the following, among other issues:

  1. Plan amendment requirements (including the timing of any required amendments).
  2. Any necessary corrections relating to plan operations for periods before future guidance is issued.

Related Item: IR-2013-72, Treasury and IRS Announce That All Legal Same-Sex Marriages Will Be Recognized For Federal Tax Purposes; Ruling Provides Certainty, Benefits and Protections Under Federal Tax Law for Same-Sex Married Couples

Employee Health Improvement & Corporate Wellness Plans

Posted August 28, 2013 by ABlume

Increasingly, employers are looking to data analysis and predictive modeling to identify and understand the health factors driving the cost of their health benefits program. With approximately 75% of health care cost attributable to people with chronic diseases, and the extensive body of evidence attributing chronic disease to lifestyle factors such as smoking, poor eating habits and physical inactivity, these same employers are actively seeking ways to promote positive changes in employees’ lifestyles by helping them reduce their health risk factors.

Corporate wellness programs have proven effective in a wide variety of industries and implementations, improving employee health, decreasing burden on the healthcare plan and system, and even enhancing employee satisfaction. Further, it can bolster hiring practices and decrease turnover. Beyond this, wellness programs play a positive role in an organization’s ethics. Learn more about employee health improvement and corporate wellness programs here.

Benefits Administration & Consultation Services

Posted August 21, 2013 by ABlume

Employee benefits vary greatly between types of locations, types and sizes of organization, and a litany of other factors. Knowing which benefits plans work best for your company, and how to implement and regulate them, can prove quite challenging. Consulting the experts at Crawford Advisors can set your company down the path to success with strategies tailored to your unique needs. Here are some of the benefits administration services Crawford Advisors offers:

  • Benefits Enrollment Support
  • Benefits Call Center & Customer Service
  • Consolidated Billing
  • Benefits Account Management

To learn more about which benefits administration services are right for your organization, contact us.

Court Overturns Benefit Denial Due to Plan’s Improper Application of Experimental Exclusion

Posted August 14, 2013 by ABlume

From EBIA

This decision replaces an earlier decision that upheld a self-insured health plan’s denial of benefits for a participant’s surgical procedure because the plan language clearly excluded the procedure as experimental. But after learning that the language actually came from the claims administrator’s internal policy document (not the plan itself), the court vacated its earlier decision and reconsidered the administrative record. The court reviewed the benefit denial “de novo” (anew), rather than applying a deferential standard of review, because the committee that made the final decision was not the ERISA plan administrator and had not been delegated discretionary authority.

The court’s review focused on the plan provision excluding experimental and investigational treatments because the plan’s claim denial letter and two appeal denial letters had not challenged medical necessity. The court concluded that the plan’s claim denial letter and first-level appeal denial letter both relied solely on language excerpted from the claims administrator’s internal policy document stating that the requested procedure is experimental or unproven—copied verbatim each time, without any explanation of how it applied to the participant’s situation. And the second-level appeal denial letter similarly repeated the same rationale in reliance on the earlier letters. In particular, none of the denial letters responded to (or even acknowledged receipt of) detailed information provided by the participant’s doctor regarding the procedure’s repeated use, safety, and efficacy for treating patients with the participant’s diagnosis. (The court also noted a number of other procedural improprieties, including inconsistencies between decisionmakers’ internal notes and the denial letters and confusion over whether the participant had been offered or received an external review.) Ultimately, the court concluded that bare reliance on the claims administrator’s internal policy determination was not sufficient to demonstrate that the experimental exclusion applied, and ruled that the participant is entitled to benefits.

News? A Limit on Consumer Costs (Out of Pocket Max) is Delayed in Health Care Law

Posted August 13, 2013 by PHaynes

Head over to Google and enter “NY Times limit consumer costs delayed health care law”, then hit search.  You’ll see articles from the NY Times, the Boston Globe, Huffington Post, etc.  Even GOP.com is getting in on the action with their post, “Past is Prologue: Another Broken Promise and ObamaCare Delay”.  Good luck getting the NY Times article to even load — since the Drudge Report posted it (as a headline) their servers are overwhelmed.

The important take-away here is that none of this is news!  According to The Hill.com, this provision has gone “unnoticed”.  Well, not for our readers, clients and friends–for them, this is not NEW news at all.  These articles (and the one from Forbes) reference a February 2013 Federal Register rule that provided non-grandfathered health plans additional time (one year) to coordinate the OOPMaxes (Out of Pocket Maximums) that a plan would have to enforce if they had separate vendors for their Medical and Prescription Drug plans.  Here’s our February 21, 2013 article on this (which references the DOL’s Affordable Care Act/PPACA FAQs Number 12).  Then, here’s our May 22, 2013 article entitled, “Your OOPMax, Your PBM and Your Non-Grandfathered Health Plan.”

As that famous law-enforcement officer from South Park, CO is so fond of saying, “Nothing to see here.  Just move along.”

Nothing_to_see_here

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How Will Income be Verified in the Exchanges?

Posted August 9, 2013 by PHaynes

We’ve all been asking ourselves how will the IRS/DOL/HHS verify the income that consumers say they are earning?  Will they only look at last year’s filed W-2/1040?

Well, wait no longer.  CMS issued guidance this week on just this issue.  Their new FAQ describes a multi-step verification process that begins with the projected annual household income that individuals submit on their applications. According to the FAQ, an Exchange will always use tax filing and Social Security data to verify household income information provided on an application. They state that if the income cannot be verified using IRS and SSA data, then the information will be compared with wage information from employers provided by Equifax.

What happens when Equifax does not substantiate the income?  Then the Exchange will request an explanation or additional documentation. Then, an individual will be eligible for affordability programs for 90 days, based on the submitted income [however, they will be subject to reconciliation—and might see their monies recouped].  If the requested documentation is not provided, the eligibility determination will be based on the IRS and SSA data (but if IRS data is unavailable, the Exchange must discontinue any advance payments of the premium tax credit and cost-sharing reductions).

CMS’ FAQ references earlier guidance indicating that HHS will exercise “enforcement discretion” for 2014, so that an Exchange may request the additional documentation from a statistically significant sample of individuals, but only if a number of conditions are met: (1) The Exchange has IRS data, (2) the individual submits income that is more than 10% below IRS and SSA data, (3) Equifax data is unavailable, and (4) the individual does not provide a reasonable explanation for the inconsistency between the attestation and the data.

For other cases where the consumer’s stated earning cannot be verified using data from IRS, SSA, or Equifax—and the individual does not provide a reasonable explanation for any discrepancy—the Exchange must request additional documentation.  For the Federally Facilitated Exchanges (FFEs), their initial sample size will be 100%, so that all such individuals are asked for documentation.  By contrast, State-based Exchanges may use other sample sizes (100%, less or much less).

Final thoughts—CMS’ FAQ just addresses how they’ll go about verifying income.  At some point they’ll also have to verify whether or not the consumer has access to employer-based coverage, if that coverage is creditable (under PPACA’s requirements) and if that coverage is available at 9.5% of the consumer’s income.  If the consumer’s employer’s plan meets those criteria, then the consumer will not be eligible for subsidies.

Exchange plans could cost less than expected

Posted August 7, 2013 by ABlume

by Allison Bell, lifehealthpro.com

Typical exchange plan rates are lower than expected.

That’s the word from the U.S. Department of Health and Human Services, which highlighted the new information in a report Thursday.

Eleven states have released rates for next year for their plans sold under the Patient Protection and Affordable Care Act’s exchanges.

HHS analysts found that the average cost of a silver plan in the individual market exchanges will be about 18 percent less than what HHS had estimated, based on early predictions from the Congressional Budget Office.

Six states have published 2014 small-group market price data.

There, the administration estimated that the lowest-cost silver plan will be 18 percent less expensive in 2014, on average, than a comparable plan would cost if the pre-PPACA rules were still in effect.

PPACA calls for HHS to work with states to make exchanges, or health insurance supermarkets, available to individuals and small groups in all 50 states and the District of Columbia by Oct. 1.

The exchanges are supposed to sell four “metal levels” of coverage — bronze, silver, gold and platinum — along with high-deductible catastrophic plans aimed at workers who cannot qualify for PPACA subsidies but have a hard time paying for low-deductible bronze plans.