Insurance Enrollment Frequently Asked Questions
October 1, 2014
Vol. 10, Issue 10
With insurance enrollment only a few short weeks away, I’ve been receiving many questions about what to expect in 2015 and how the decisions you made in 2014 will affect you - especially when tax time comes! I thought this would be a good time to ward off any fears you might have about insurance enrollment and help you plan for a smooth transition into 2015.
Should I Auto-Renew My Health Plan for 2015?
2015 insurance enrollment begins November 15, 2014. You have the option to auto-renew your plan, but it’s important that you schedule a time to meet with your Personal Benefits Consultant soon to review your options. Many new insurance carriers are entering the market and there may be a more affordable plan available. If you find a new plan, your Personal Benefits Consultant can easily help you enroll in your new plan choice.
If you receive premium assistance or plan to in 2015, it’s critical that you and your Personal Benefits Consultant meet by phone and discuss all of your options before deciding to auto-renew your plan. Premium subsidies are based upon the cost of the second lowest priced Silver plan or “benchmark plan.” When the rate changes for a benchmark plan, so do premium subsidies, and many of these plans are scheduled to change in 2015. If the benchmark plan rate goes down, this could have devastating effects and could significantly increase your out-of-pocket premium costs in 2015.
You can learn more about the effects of auto-renewing your health plan by reading our blog, Why Allowing Your Health Plan to Auto-Renew in Could Cost You Money.
Should I Keep My Grandfathered or Grandmothered Plan?
If you know you don’t qualify for premium assistance, it’s likely in your best interest to keep your plan, but be aware that many of these plans have policy limits and exclusions which may make getting a new plan more enticing. If you think you might qualify for premium assistance, you may be able to significantly reduce your monthly premiums with advance premium tax credits. It’s important that you meet with your Personal Benefits Consultant to weigh your options. Grandmothered plans are also scheduled to terminate in the near future - some in 2014, some in 2015, and some in 2016, so you may want to consider changing plans now.
How Do I Estimate my Income for 2015 to Receive a Premium Tax Credit?
This is probably one of the most difficult topics when it comes to the Affordable Care Act. When you meet with your Personal Benefits Consultant, you’ll want to have your most recent tax return and recent pay stubs available. This is where things can get a little bit sticky!
If you’re self-employed, you absolutely must keep business records. If you don’t use Quickbooks or another financial tracking system, you must at least keep a self-employer ledger - a general business book, and document:
- Each income payment received
- The date income was received
- From whom the payment was received
- Business expenses
Once you subtract your business expenses from your income, you have a pretty good estimate of your annual income. Remember - the IRS sent millions of Americans letters this year requesting additional information regarding citizenship and income verification. Without this documentation, you could lose your premium subsidy and lose your plan!
Your Personal Benefits Consultant will be able to determine what income should be included when calculating premium tax credits - including social security income or survivors’ benefits, retirement funds, alimony, et cetera, so be sure to have all forms of income available for review.
Will I Have to Repay Any of My 2014 Advanced Premium Tax Credit Back to the IRS?
I must say this is the hottest question I’ve received this month! Here’s the bottom line, advanced premium tax credits were awarded based upon information provided to healthcare.gov or the appropriate state marketplace regarding your 2014 estimated income. As we all know, circumstances change, job changes, and life happens. Giving an accurate estimate is all but impossible.
When you file your 2014 tax return, the IRS will reconcile your premium tax credit. If you chose NOT to receive your credit in advance, you will receive your premium tax credit in the form of a refund (less any taxes you may owe). If you received an advanced premium tax credit but it was too low, you’ll also receive the balance in the form of a tax refund (less any taxes you owe). On the other hand, if you received an advanced premium tax credit that was too much, you will have to repay the IRS. Repayment caps have been set as follows:
|Individual 2014||Repayment Cap||Family 2014||Repayment Cap|
|Under $22,980||$300||Under $47,100||$600|
|$45,961 or higher||Full amount||$94,201 or higher||Full amount|
If you originally estimated your income to fall just above the federal poverty level but believe you’re going to come up short this year, your repayment will be capped at $300. You’ll want to be as accurate as possible for 2015 and the IRS may require further documentation justifying your estimate. We don’t know yet how many people will fall into this category and the how the IRS will respond in future years to this scenario, but I’m sure we’ll hear much more about this in 2015.
Your Personal Benefits Consultant has steadily been preparing for 2015 insurance enrollment and can answer any questions you may have about your current coverage, new coverage options and premium subsidies. If you’re not sure who your Personal Benefits Consultant is, contact HSA for America at 800-913-0172, and we’ll get you set up for an appointment with your Personal Benefits Consultant. We expect the 2015 enrollment period to be the busiest ever and encourage everyone to schedule a time now to meet with their Personal Benefits Consultant!
To your health and wealth!
"Wiley IV, Wiley III and Christie on a family hike just outside San Miguel"
President - HSA for America