Making The Premium Tax Credits Work
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Making The Premium Tax Credits Work

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Making The Premium Tax Credits Work

Making The Premium Tax Credits Work

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  • 1. Tara StrawHealth Action 2012 January 19, 2012
  • 2.   Do you know what your tax credit is?
  • 3. Recalculate the creditConsider: ◦ Your family (& your tax family & your coverage family) ◦ Income (all sources) ◦ Other sources of coverage ◦ Your benchmark premium ◦ Your advance credit
  • 4.  The credit for 2014 was calculated based on your 2012 tax return. Since then … ◦ Your marital status has changed ◦ Your family has changed ◦ Your job has changed ◦ Your insurance coverage has changed
  • 5.  Taxpayers who marry during the year ◦ Problem: 1+ 1 = 3 ◦ Recommendation: Account for lower incomes while people are single. Taxpayers who divorce Taxpayers who are separated ◦ Problem: No tax credit if you file separately from your spouse! ◦ Recommendation: Exceptions for abandoned spouses, domestic abuse, and other circumstances.
  • 6.  Changes in family composition People on your insurance, but not on your taxes People on your taxes, but not on your insurance * May not reflect your actual family.
  • 7.  What to report When to report Who to report toMid-year job loss  Subsidy may be too lowMid-year job gain Subsidy may be high
  • 8.  More types of coverage = more complications ◦ Did the Exchange get it right? ◦ Did I get it right? ◦ Trapped between Medicaid and the Exchange? ◦ Premium stacking Is your employer-sponsored coverage affordable?
  • 9. Repayment or additional credit (up tobenchmark premium) Income Maximum Repayment (Single/Family) <200% FPL $300/$600 200%-300% FPL $750/$1,500 300%-400% FPL $1,250/$2,500 >400% FPL No Cap
  • 10. Vanessa is married… but separatedfrom her husband.She has 3 children.She has wages of$31k, but sellscosmetics on theside, earning anadditional $2,400. 10
  • 11.  Medicaid eligibility ◦ $33,400 for a family of 4 is 143% FPL ◦ Kids look to be Medicaid or CHIP eligible Marital status ◦ Is she eligible for credits or excluded by filing separately from her husband? Benchmark ◦ Second-lowest cost silver self-only plan (~$4,300) Vanessa’s share of premium is 3.6% ($155/yr) ◦ Vanessa’s credit is $4,142
  • 12.  Change the employer affordability test Ease family transitions Mandate the use of forms that simplify consumer decisionmaking and end-of-year reconciliation Prepare for comprehensive training of enrollment staff and volunteers
  • 13.  Clear rules and uniformity on reporting ◦ Exchange duties:  Makes advance credit determination*  Collect names and employer ID of each employer with one or more employees determined eligible for the tax credit  Determination that employer did not provide minimum essential coverage, plan didn’t meet 60% AV, or plan was unaffordable
  • 14.  Identify ◦ Who is eligible for credits? ◦ Who will find them? Simplify ◦ Don’t require people to remember/calculate/estimate – Tell them what they need to know! Demystify ◦ Customer service ◦ No black box on information ◦ Make sure consumers have tools to make educated decisions in exchange and ESI ◦ Give consumers tools to understand reconciliation