How To Help Your Clients Financially Through The Federal Government

Transcription

1 Webinar Transcript December 4, 2014 Financial Help for Marketplace Health Insurance: Tax Credits & Cost Sharing Hello everyone and welcome to today s ACE TA Center webinar. I am Mira Levinson the ACE TA Centers project director. Our goal here at the ACE TA Center is to help Ryan White grantees and providers and role diverse clients, especially people of color in health insurance coverage. Today our presenters are going to talk to you about how your clients can get help from the federal government paying for premiums and out of pocket cost, through tax credits and cost sharing reduction. We ll talk about who is eligible, how to apply, how these subsidies are paid and what happens at the end of the year when underpayment and overpayments are reconciled. Before we get started, I m going to go over a few technical details. First of all, attendees are in a listen only mode but we do want to hear from you. If you have a question, just use the chat box at the lower left of your screen to chat with the presenter at any time. You can send us contact questions or any technical issues you might be having as well. If you think of a question you want to ask after the webinar you can always send us an at acetacenter@jsi.com. The easiest way to listen way to listen to today s calls is through your computer but if you can t hear the first thing to do, is to make sure your computer sound is turned on. If you still can t hear us or if you experience a sound delay try refreshing your screen or you can mute your computer audio and call in using your telephone, that number is Also again if the presenter and the slides are out of sync with each other at any time during the call, you can just mute your computer speakers and use this telephone number instead. On today s call, you will learn how to apply for and maintain financial help, you will know who may be eligible for assistance, you will understand how underpayments and overpayments are reconciled and you will learn how some Ryan White HIV AIDS Program Grantees including ADAP s are supporting the process. Today s presenters including Laura Gerard, Lori Nichols and Amy Killelea. Lori is an ACE activity manager and caller of development of many of our tools. Lori brings a strong background and help perform as well as technical assistance and training and Laura is an ACE technical advisor who brings over 10 years experience in public health program development and management. Laura s current work is focused on enrolment strategies under the affordable care act. First Lori will walk you

2 through what you need to know about tax credits and cost sharing reduction and then Laura will apply this information using a couple of case example. All this information is also available on our webpage in our new premium tax credit and cost sharing reduction FAQ which we ll show you later in the call. We are also really pleased to have Amy Killelea from NASTAD the National Alliance of State and Territorial AIDS Director on our webinar today. Amy is the associate director of health systems integration at NASTAD where she s helping to lead NASTAD help performance effort, including developing implementation resources and TA for State HIV AIDS program, as well as working on policy recommendations and analysis to inform federal implementation. We also have some other ACE TA Center staff on the line, along with the HIV AIDS of bureau staff to try and answer any questions that come up on the call. As a reminder today s webinar will be archived on our target center page which is Targethiv.org/ace and all participants on today s call will also receive an when it s posted so you can share with your colleagues. You can also find links at this website for all the tools that we are going to present and if you forget the direct link, you can always find us by going to the Target website homepage or through the topic library there. Let s do a couple of quick polls, first I would like to see how many of you have been on an ACE TA Center webinar before? Go ahead and select either yes or no and then hit submit. We have some answers coming in and you will be able to see the results once you ve given your entry. It looks like about two thirds of you have been on our webinars before, maybe a little bit less. We are excited to have many of you back and we are also thrilled to have about 40% new participants from today s call. Let s do another quick poll just to see who s on the phone. Take a look at this list and tell me what your role is in your Ryan White HIV AIDS program funded agency? If you are not a grantee or provider you can just click on NA at the end or if you do work at a Ryan White program but you don t see your title on the list, then just click other. If you are a program manager, case manager, clinical director or staff, benefit and enrolment staff, director or administrator, QA and compliance staff etcetera. It looks we have a nice mix of folks on the call today about a quarter of you are program managers, another 15% or so are case managers and also a good number of directors and administrators and a good mix of other people as well. Honestly I am not surprised, because this is a challenging subject and hopefully we can break it down for everybody, in nice simple terms. I m going to turn it over to Lori now and she s going to talk about tax credits and cost sharing reduction, Lori? 2

3 Lori: Lori: Thanks Mira. I think I m up to your task of breaking it down into a simple, simple words hopefully. The first thing that I want to do is define these things that are called, premium tax credits and cost sharing reductions. These are both two forms of financial assistance, they both come from the Federal Government, they do have some things in common and then there are some distinct differences between the two. The good news is that they are both, designed to help with the cost that are associated with market place health insurance. I m going to make sure that I can work the technology here on my own; I m trying to advance the slides. Let s see Government scenes, is it advancing on your end Mira because I don t see it moving on mine. No it s not. Why don t I go ahead and do your slides for you Lori and just you can keep presenting. Okay great, sorry about that. I m clicking the arrows but it doesn t seem to be cooperating. Alright so if you are advancing to the next slide, there we go. First we are going to take about premium tax credits or PTC s for short and this is financial assistance is given in the form of a tax credit, it helps lower the cost of premium, that s that monthly bill that we pay every month to keep our coverage. What s nice is that the name of this actually tells us a lot about what it is. With cost sharing reductions or CSR is not as simple to tell what they are just from the name unfortunately. Cost sharing reductions are given in the form of discounts instead of a tax credit. They are applied to an existing silver market place plan and we ll talk about the medal levels in a moment. They are designed to help reduce the out of pocket cost for things like deductibles, copays and coinsurance. One convenience of cost sharing reduction is that the discounts are automatically applied to the CSR silver plan that someone is enrolled in. For example someone might have a $1,000 deductible under a standard silver plan that doesn t have a cost sharing reduction but if that person is enrolled in a CSR silver plan, their deductible would automatically be reduced so he or she doesn t have to track or receive to get reimbursed for that discount. What do premiums tax credits and cost sharing reductions have in common? Well the first is that in a lower income categories those between 100 and 250% of the federal poverty level, people can actually receive both tax credit and cost sharing reductions. At the higher income categories, in this case it will be those between 250 and 400% of the federal poverty level, someone is only eligible for the premium tax credit. It is worth noting that someone would not be eligible for just the cost sharing reduction, without also being eligible for the tax credit. Secondly, they are both used towards the cost of market place insurance. Therefore the 3

4 eligibility for tax credit or cost sharing reductions is determined when someone is either applying or renewing their coverage in the market place. The amount of financial help available depends on somebody s income and the cost of the premium. Obviously these things can change from year to year so it s important to help clients review the plan options every year based on how much financial help that they may get. In some cases someone who wasn t eligible for financial assistance last year, may very well qualify in Particularly in cases where premiums have drastically increased and of course this works both ways so just because somebody received financial assistance last year, doesn t necessarily mean that will be eligible for that same amount in 2015, particularly if his or her income has gone up. You might be wondering, do my clients have to pay anything for their market place insurance if they are getting these types of financial assistance? While the premium tax credits and the cost sharing reductions can go a long way towards lowering the cost of insurance, it is important to know that even if someone receives both, a premium tax credit and a cost sharing reduction, that they could very well still be some remaining cost of coverage that they have to pay. Clients can check with the Ryan White programs in their state, which includes ADAP to see if they can help with any of the remaining cost. It s also good to tell your client, as you are helping them through the enrolment or own their process about their responsibility and paying for any remaining cost. In that way there s no, unpleasant surprises when they have to pay their first premium or their copay. One important distinction between premium tax credits and cost sharing reduction is in how they get paid. On this slide, you ll see that for the premium tax credit a person has two payment options. The first option is that the credit can be paid directly to the insurance company every month. This is actually just lowers the monthly premium that needs to be paid by the individual. There s another option not for the person or the family can wait to get the credit in one lump sum at the end of the year when he or she files their federal tax return. I ll say that when people, when they go for option number one, it s called an advanced premium tax credit and that s because they are getting the credit in advance. They are not waiting until the end of the year. If someone is eligible for a tax credit in 2015 for example and they wait for the lump sum, they don t actually receive that money until the early part of 2016, when they file their 2015 taxes. This is very different then for the cost sharing reduction which only has one payment option and that option is to have the discount paid directly to the insurance company every 4

5 month. I m going to pause here for a moment and just check in with beyond some of the info that we just covered. I m going to ask a quick polling question and that is, what do premium tax credits and cost sharing reductions have in common? There s five possible answers here and there s actually more than one, can be a correct response. Your options are, to help pay for insurance premium, that the amount depends on your income, that the amount can change from year to year, that they can be used for a silver plan in the market place and that they can be paid directly to the client or family. Just take a moment and feel free to check off any of those boxes that you feel have a correct answer. We see some responses coming in, I will give you all a couple more seconds, I know that there s a lot of choices there to look through. Great I think will close the poll in maybe two three more seconds. Awesome, let s go ahead and take a look at what kind of responses we got. We see that, most everybody responded that the amount can change from year to year, that s absolutely correct. That s the third response there. I also see, this looks like a second most common response with the amount depends on your income and that is also absolutely correct. Let s look at the top here so help pay for insurance premium, this and the question might have been a little tricky because we asked about what they have in common and the premium tax credit, are what you use to pay for the premiums. The cost sharing reduction actually do not go towards premium they go for the out of pocket expenses like your deductibles or your coinsurance. In this case that is not something that both have in common, let s go on down the list, can be used for a silver plan. This is also an interesting one so while the amount of the tax credit and the cost sharing reduction are calculated based on the cost of the silver plan, for the premium tax credit, folks can actually apply that tax credit towards any plan, any medal level plan in the market place so that they can apply it to a bronze, a gold, a platinum if they choose and of course there s silver. For the cost sharing reduction it actually only does apply to the silver plan. That would be another case where these two, the tax credit and the cost sharing reduction they do have it in common, they can both apply it to a silver plan so the premium tax credit also extends beyond that. Kind of a little tricky answer there, I just wanted to go into that in detail and then the last one can be paid directly to the client or family. In the case of the premium tax credit, that is true. The client or the family can receive that tax credit as I mentioned in a lump sum and it will come directly to them but the cost sharing reduction does not have that option that always 5

6 goes directly to the insurer and then it just, it s seen by the client or the family in the form of a discount. They don t have to pay it and that get reimbursed. Thank you for taking the poll, I hope that that was helpful and then the next slide that we have actually just another sort of recap of some of this information and it s in a little bit different format, because somehow it s easier to see things lined up side by side. We see that both the premium and tax credit and the cost sharing reductions can be used to pay for some different things. If you look at the con PTC, Premium Tax Credit can be used for the premiums but nothing below that so not the deductibles not the copays and not the coinsurance. Then the cost sharing reduction is just the opposite, not used for premiums, used for all the other items you see listed there. Can they be paid monthly? Yes, they both can be paid monthly director to the insurer but obviously the cost sharing reduction cannot be received in a lump sum pay directly to the person or family. Then that last part there, it s something that I was just talking about a moment ago when I referenced the different medal level plans, the premium tax credit can be applied to any level plan so platinum, gold, silver or bronze but the cost sharing reduction can only go towards the silver plan. Great so who is eligible for this premium tax credit or cost sharing reduction? There s a number of factors that have to do with income and family size, as well as all the other eligibility considerations that are just related to the market place plan. First I m going to talk about the income. One thing to remember is that the eligibility income range is actually greater when we are talking about the premium tax credit than when we are talking about the cost sharing reduction. As long as a client s income is below 400% of the Federal Poverty Level, they can receive the tax credit. It s only those with up to With incomes up to 250% of that federal poverty level that are actually eligible for the cost sharing reduction. That means that people whose incomes are in that level, that between 100 and 250% of FPL, they can actually be eligible for both the premium tax credit and the cost sharing reduction. I should note that people who receive the premium tax credit or the cost sharing reduction, they cannot be eligible for public assistance such as CHIP, Medicaid or Medicare. They also can t be eligible for an employer plan that meets the ACE s definition of minimum essential coverage. They can t file, when they file their taxes, they can t be filing as married, filling separately they actually do, if they are married then they do need to file a joint return. The exception now, I ll mention is in cases of domestic abuse or abandonment. They cannot be claimed as a dependent by another person. Next slide please. Our next table illustrates the relationship between income limits 6

7 and family size. These numbers reflect those Federal Poverty Level or FPL levels that we ve been talking about. These are the 2014 guidelines and these are for the continental US. Like they will say that the guidelines are slightly different in both Alaska and Hawaii. These income limits are calculated based on something called Modified Adjusted Growth Income or MAGI which you may already be familiar with but I will touch on it again in a moment. For now I just wanted to point out that the FPL rate increased with family size. It s not a one to one ratio so what that means that it doesn t double for a family of two, it doesn t triple for a family of three. For each additional family member, you will see that FPL increases by $4,060. Since those with incomes up to 250% of FPL for that second column there, for every additional family member, for those to be eligible for the cost sharing reduction, that range increases by a little over $10,000 for each additional family member. If we look at the premium tax credit range, that s that third column there, the income limit increased by a little bit over 16,000 for every additional family member. The next slide here just highlights an example, if you are looking at a family of three, if that family were to make $19,790 which is that first column that will put them at that 100% of FPL. At that level they are eligible for both cost sharing reductions and premium tax credit. If they make as much as 49,475 which is the amount in the second column, they are still eligible but that s the maximum income that they can make and still be eligible for the cost sharing reduction. At that point they are still eligible for both, the cost sharing reduction and the premium tax credit. If we look over at this third column, if that family were to make as much as 79,160 that s the maximum that they can make and still be eligible for the tax credit. If that window in between the 49,475 and 79,160 that they are only eligible for the tax credit A moment ago I mentioned that all the income guidelines are based on something called Modified Adjusted Growth Income or MAGI and I just wanted to explain what that is. MAGI is when you have your total income and that is sometimes referred to as the gross income. You minus any of your personal exemptions or your itemized deductions but then you have to add in any tax exempt income that you get either from social security or from interest or from any income that s earned in a foreign country. If you would like more information on MAGI ACA actually gave an excellent webinar presentation last year on understanding MAGI. We have our links to that archived presentation and that we ll be chatting out the link, oops it looks like it s already been chatted out, thank you. That 7

8 link is in the chat box, if you are interested in looking at that archive presentation. Then one more thing I wanted to mention is how immigration status impacts the eligibility for this few types of financial assistance. If your client are lawfully present in the United States so what that means, lawfully present meaning that they are not a US citizen but they do have permission to live or work here so if they meet that and they meet the other eligibility requirements that we have already talked about Then they too are eligible for the same premium tax credit and cost sharing reductions. ACE TA center is going to be providing more details on this, we are going to have an upcoming webinar next month, it s going to be called Immigration Status and Health Insurance for People Living with HIV and AIDS under the ACA. I don t believe that an exact date has yet been determined but as I mentioned it will be sometime in January so stay tuned for more details on that, we ll be sure to share that with everyone. In the meantime for more information on immigration status, we are also going to chat out a link, to a document that was published by the National Immigration Law Center that you might find helpful. It looks like that just went out, just look for that in your chat box. With that I m going to hand it back over to Mira. Great, thanks Lori. Okay so let s do another quick poll to see what we ve learned. For this one you can check all that apply so take a minute and check off one or more answers you think are correct. Which of these must be true for someone to be eligible for both, premium tax credit and cost sharing reductions? Not eligible for Medicaid, income between 100 and 400% of Federal Poverty and or lawfully present, they must be lawfully present in the United States. It looks like some votes are still coming in, I m going to give you guys one more second to finish clicking and so it looks like as a group, we are pretty much correct. The first one, not eligible for Medicaid is correct. The client can t be eligible for Medicaid, Medicare or CHIP to be eligible for premium tax credit and cost sharing reduction. Number two, is a trick question because to be eligible for a premium tax credit the client s income must be between a 100%and 400% of the Federal Poverty level but to be eligible for a cost sharing reduction the client must be under 250% of the Federal Poverty Level. Number three is also correct, the client does not need to be a citizen but here she must be lawfully present in the United States. With that I m going to turn it over to Laura Gerard to talk about what needs to happen during the application and renewals process to make sure clients get the right amount of financial health each year and take us through a couple of case examples. Laura: Great thanks Mira. Hi everyone, now I m going to talk about applying for and renewing premium tax credits and cost sharing requirements and why 8

9 your client should update their information each year. We can go to that next slide, tax credits and cost sharing reductions are only available with help plans purchase through the market place. Clients can apply for a premium tax credit when they are applying for a market place plan. Also there s not a separate process to apply for a cost sharing reduction. Eligibility is automatically determined when applying for the premium tax credit. It s important to keep in mind that clients must authorize collection of tax data from the IRS every year in order to receive or continue to receive premium tax credits and cost sharing reduction. If your client was enrolled in a market place plan last year, they should have received a renewal notice from their health plan. If your client received a premium tax credit last year that notice from their health plan or the market place, should include an estimated amount that they will receive in The notice also includes a 14 digit plan number that the client will need to use when they log into the market place to renew their plan. One last thing to keep in mind is that clients who are renewing should remember they must update any income or helpful changes from the year before. Examples of helpful changes are adoption or birth of a child or someone moving out of the households. If there are any changes in the client s household during the year to income family size or employment, these can affect the amount of premium tax credit or cost sharing reductions a client is eligible for. It is important for clients to report after it, information when they apply and any income or a family size changes throughout the year to avoid owing money later. Amy is going to talk more about this in a few minutes. Once the calendar year ends, clients who receive premium tax credits must file the federal tax return. As Lori mentioned in earlier slides, if a client is married he or she needs to file a joint tax return with his or her spouse except in the cases of domestic abuse. Legally married, same sex couples can apply jointly for tax credits in the market place. As Lori also mentioned individuals cannot be claimed as a dependent on someone else s tax return and also receive a tax credit or cost sharing reduction. The IRS has a list of places on their websites but offer free tax filling assistance. They update this list periodically so it s important to check the website regularly and remind your clients to call before going to one of the sites. The link is shown on this slide and we are also going to chat that link out to you now. Now we re going to walk through a couple of examples to help you understand how tax credits and cost sharing reductions work in practice, to help you work with clients during this open enrolment period. 9

10 Our first case study is about Alex. You may want to take notes as we describe who Alex is because we ll ask you some questions about Alex s eligibility for financial help in a minute. Alex lives alone and he makes $35,000 year. That is approximately 300% of the Federal Poverty Level. Alex recently immigrated to the US from Mexico and he s lawfully present in the US. That means he s a non-us citizen with permission to live or work in the US, this is Alex s first time buying health insurance. Now we have a poll with three questions on Alex s eligibility. The first question is, is Alex eligible to receive a premium tax credit? Sorry, I think I have the wrong question Wrong order of questions. The first question is, what level plan can Alex enroll in? The choices are platinum, gold, silver, bronze or any level. I will give you a couple second to go ahead and select an answer. There s only one correct answer to this question and as the results are coming in, looks like most of you selected any level and that is the correct answer. Alex can enroll in any level plan, platinum, gold, silver or bronze because he s only eligible for a premium tax credit. With the premium tax credit there, there s no restriction on the level of plan that restriction is only with the cost sharing reduction. We ll go on for our next question, is Alex eligible based on his immigration status? This is a yes or no, the options are either yes, he is eligible or no, he is not eligible. If you want to, we ll take a few second while everybody selects their answer and it looks like most of you almost 96% said that, Yes, Alex is eligible based on his immigration status. That answer is correct; Alex is able to apply because he s lawfully present in the United State. We ve got one more question for you on Alex s eligibility and that is, if Alex is eligible to receive a premium tax credit and or a cost sharing reduction? The options for answers are, premium tax credit only, cost sharing reduction only, both or neither. We ll take a few seconds here to select your response. It looks like most of you; almost 75% said that, Alex is only eligible for a premium tax credit. That is correct and that is because his income at 300% of the Federal Poverty Level is too high for Alex to qualify for a cost sharing reduction. That cost sharing reduction as you remember from Lori s slides, is only available for people under 250% of the Federal Poverty Level. Thanks for taking, for answering those questions and now we are going to just provide a summary of Alex s case. As we mentioned Alex is lawfully present in the US so he can apply for financial health through the market place. 10

11 Given that his income is 300% of the Federal Poverty Level he s only eligible to receive a premium tax credit, not a cost sharing reduction. Because there are only plan level restriction for cost sharing reduction, Alex is able to select any level of plan, platinum, gold, silver or bronze. I didn t ask you about this in the poll but I did want to point that Alex is at the upper end of the income range. He is required to contribute 9.5% of his monthly income towards his premium. Just a final note that we keep stressing and that is that Alex needs to file taxes at the end of the year, to receive the premium tax credit and to continue to receive that tax credit. We have on more case study for you and our next clients name is Calvin. If you want, remember to take notes to help with the questions later. Calvin is legally married to his partner and they have two children. Their household income if $59,000 a year and that is just below 250% of the Federal Poverty Level. Calvin and his family were enrolled in a health insurance plan through the market place last year so they are renewing their 2014 health plan. Now we ve got two questions to, on Calvin s eligibility. The first question is, can Calvin enroll in any level plan? It looks like the responses are coming in, about 65% said yes and 35% said no. The answer to this question is no and that s because, for Calvin to receive both the premium tax credit and the cost sharing reduction that he and his family are eligible to receive, he has to enroll in a cost sharing reduction silver level plan. That answer would be no, for them to receive the cost sharing reduction Let s move on to the next question and that question is, are Calvin and his family eligible for a premium tax credit and or a cost sharing reduction? If you want to take a few seconds and collect your answer, the responses include, premium tax credit only, cost sharing reduction only both or neither. Okay and it looks like most of you about 86% selected both and that is the correct answer because of their household income they, Calvin and his family are eligible for both premium tax credit and the cost sharing reduction. Thanks for taking that poll and we ll just summarize what we learned about Calvin and that is, he and his family were, are eligible for both the tax credit and cost sharing reduction because their income is just below 250% of the Federal Poverty Level. In order to receive the cost sharing reduction they need to select a cost sharing reduction silver plan, if that wasn t the plan that they had selected last year. It s also to remember, it s also important for Calvin and his family to use that 14 digit number from their 2014 health plan, when they apply for 2015 assistance in the online market place. Just a last note and that is Calvin and his family will need to contribute 8.1% which is about $395 of 11

12 their household income towards the cost of their monthly premium. He and his partner will need to file their taxes jointly at the end of the year. Thanks Laura. I think that might too so this is Mira here and I just want to let you all know that, I know that was a lot of information, we really appreciate everybody jumping in there and trying to answer the poll. I want to let you know, that all of that information is included in a brand new tour that is posted on our webpage, all about financial help for health insurance. It s organized as a list of frequently asked questions and includes everything that we re talking about today, including that comparison checklist of premium tax credit versus cost sharing reduction. We ve just chatted out the link to you for that new resource. I also want to let you know that we ve got a comment from a couple of people that the link to the MAGI webinar wasn t working, it s working for us so if those of you that tried it and it wasn t working, could just try again and just chat us if it s not working for you, that will be great. I think it should be just fine. With that I m going to turn it over to Amy Killelea to talk with you about financial reconciliation, Amy? Amy: Great, hallo and good afternoon everybody. I m going to pick up where the last presentation, as we left off and talk about the final piece of the premium tax credit puzzle and that is reconciliation so next slide. We are going to be talking about the very end of the slides sort of the tax but the lifecycle of premium tax credit and cost sharing reductions. I think it s important to walk through it and think about as part of the entire process. As was stated in the previous presentation, this tax credits work a little bit differently than how we normally think about tax credits. Normally for ever other federal tax credits that somebody might be eligible for you check that off when you file your federal taxes and you get it in the form of a refund that s how we all so to think about and use tax credits when we file our own taxes. The premium tax credit works differently in that there s an advanced payment option, which makes a lot of sense, right. Because there are many people who would not be able to front the cost of their premiums and then wait until tax time, which is going to be well after, you ve been paying your own premiums for the entire year to get that money back in the form of a refund. Instead the tax credit works in advance and it starts when somebody enrolls in coverage. However the reconciliation piece really comes at the end of the process and I think the best way to think about what reconciliation is, is that it s a federal check, it s a way to, for the federal government to make sure that the income that was used when you apply for coverage matches up to 12

13 what your income actually was for that tax year in which you received the premium tax credit. What that means is that, when a person files a tax return for that actual year, in which he or she received the tax credit, that there are going to be a calculation for either underpayments or overpayments and those underpayments or overpayments will be reconciled. That just means that if it turns out that the federal governments paid you much over the course of the year in premium tax credit, the tax payer is going to be made to pay that amount back. If it turned out that the federal tax, the federal government paid too little throughout the year in premium tax credits then a person is going to be auto-refund. I ll talk a little bit, in more detail about that but that s the general, the general idea and I think it s also important to note, the reconciliation process applies only to premium tax credits not to cost sharing reductions. It s less complicated than it could be. Next slide. I think it s, it s helpful to kind of see reconciliation in action and really get a sense of why reconciliation exists and how it works. I think a way to do that is to think about this first year of coverage. Think about back to October of 2013, which seems like decades ago but was not that long ago. When people started applying for coverage through multi places Through in that process folks also applied for cost sharing reductions and premium tax credits and the income information, the easiest way to demonstrate income eligibility for those premium tax credits and cost sharing reduction was to submit the recent copy of a federal tax return. That, the most recent copy of that federal tax return would have been through the 2013 tax year, well if we so fast track to January 1 st of 2014 when coverage started so that s the 2013 tax year income, is the income that was used to determine what amount the federal government was going to pay in premium tax credits throughout the year and month by month. Now we are approaching the end of that, the first benefit year so the end of January at the end of the 2014 benefit year. In 2015 when people file their 2014 taxes, that s when the federal government would do that check, they are going to check to see, okay you use your 2013 income to demonstrate eligibility for premium tax credits and that s the amounts of that the federal government use to provide the advanced premium tax credit throughout the 2014 year, when you file your 2015 taxes which will show what your 2014 actual income was, the federal government is going to do a check and make sure those two incomes matched up. Again if the check indicates that, the person s income was actually, was actually lower for the year then that means a refund will be owed to that 13

14 person and conversely if the federal check indicates that a person s income was actually higher, then that check is going to result in a payment owed to the IRS. I think it s also important that, this really highlights the need that was mentioned earlier that, folks should really be reporting changes in income through the market place throughout the year. That is the best way to avoid and the under or overpayments of the advanced premium tax credit, because we know that life circumstances change. That people get new jobs, that people lose jobs, that people get raises and other changes and fluctuations in income. Next slide. How does this work and what happens at tax time? What will happen in tax time which is fast approaching for in 2015? I think it s of no surprise the IRS thinks of everything and it has created new tax forms and new tax instructions to govern the whole reconciliation process. I m sure there will be subsequent resources and webinars that go into this in a lot more detail but just to give the general picture. There are two forms I think to, that folks should be keeping an eye out for. The first one starting in January, anyone who receives the premium tax credit is going to receive a form from the market place, it s a IRS form 1095A and that s going to include a catalogue and information on how much the individual received in premium, in premium tax credits throughout the year so throughout That s step one and that information is going to be used come April or anytime before April, when a person actually files through his or her federal taxes. He or she will use that 1095A form to sell out a new tax reform, which you ll attach your federal tax, your most likely your 1040 which is form That is just a way for folks to report what they actually got in advance premium tax credit and then just swear that with their income is recorded on the 1040 so what their 2014 actual income is. Next slide. I don t want to bore everyone to death with the details of IRS form 1040 in the many, many, many boxes on there but just to note two things. There s going to be a box in a particular line on IRS 1040 that will indicate the excess premium tax credit a person owes to the IRS. Let s say you do that accounting and it turns out a person s income was actually higher according to his or her federal taxes and the income used to determine eligibility for the advanced premium tax credits. Well that, that excess premium tax credit is going to be owed back to the IRS and there s a form or there s a line on IRS 10, form 1040 that will specify that amount. On a flipside, there s also a line and a box on IRS form 1040 that s going to indicate if there s an amount owed to the tax payer as a refund. I think that there s still some questions about how this is going to work and be administered in practice and one thing to note about taxes is 14

15 that, at the end of the day, your refund or liability is owed or aggregated right. More often than not your are not going to see a special refund or administration of one particular tax credit, it s all added up together with all the tax credit you are owed and all the liability you still owe and then at the end of the day, you are either auto-refund or you owe the IRS more money. I think, we still have some questions about how this, how this will be administrated and practice by the IRS but as how taxes work, how taxes have worked in the past, is that that is like an aggregate accounting. Next slide. One important protection that I think is really good for everyone to keep in mind and I think maybe helpful to let, a client know as they are wandering their way through this process is that, they are important consumer protections that limit or cap the amount that somebody is going to owe the IRS. Let s say you did not report a huge increase in income throughout the year and you are left at tax time with a pretty hefty payment owed to the IRS, for the premium tax credits. There s a cap to how much that can go up to. As you can see its sliding scale based on income up to, $1,250 for single filers. That s an important protection that still a lot of money but an important protection none the less so next slide. I want to bring back our life cycle slide one more time and add a few more elements and I realized this is a tiny font there. I did want to make sure to point out that the ADAP Ryan White program insurance purchasing programs also play a role on this. As somewhat to the complications but I think if we start thinking about how these processes work now and how the coordination works now, we can make it less, less complicated than it needs to be. Remember that ADAP tend and in many, many, many circumstances is, paying that left over client consumer responsibility amounts after the premier tax credit is taken into account. I think in the previous slide it was mentioned that that amount that the individual owes, in premiums is sliding scale up to 9½% of income. In many cases ADAP has been filling that gap on behalf of the consumer, the beneficiary. When you think about that any refunds that are owed to the client because of an underreporting of income or even and this is still a question, we are waiting for federal guidance on that, possibly tax liabilities owed to the IRS would be the responsibility of ADAP and Ryan White insurance purchasing program. I think I will stop there and I will see, I want to make sure we have time for questions. If there are particular questions about that, if I know that it s confusing, I am happy to answer them. I want to move on to the HRSA HAB ACA policies on reconciliation and to vigorously what we know and 15

16 what we don t know yet. What we know without a doubt is that the Ryan White program is the payer of last resort and grantees must vigorously pursue client eligibility for public and private insurance. They also must vigorously pursue any excess premium tax credit that a client receives from the IRS upon the submission of the client s tax return. That s the refund right? That makes sense, that ADAP has maintained that amount for the consumer that, that refund amount through a tax return is never going to go directly to ADAP it s always going to go directly to the tax payer the consumer. It s the responsibility of grantees to pursue that the refund that went to the consumer or tax payer. On that flipside as I noted HRSA is considering allowing Ryan White program grantees to comma that flipside situation where a client owes the IRS money, because of, because income was actually higher and reported at application and throughout the year so stay tuned for that. Next slide. I wanted to point out just a few things to ADAP are doing and that they will be doing come tax time this year. I think there s been a lot of questions about what vigorously pursue really looks like and means on the screening and enrollment side but there s also questions about what that means on the reconciliation side. I think the takeaway that I would like to leave you with is that the number one left way to deal with potential overpayments or underpayments is not to have them. It s to encourage clients to really be reporting any changes in income throughout the year to the market place, that is the best way to ensure that there isn t an overpayment or underpayments that s attached to a refund or a payment owed to the IRS at the end of the year. We are seeing ADAP has really adopt that into their eligibility and application processes by number one requiring everybody, all ADAP clients to take the premium tax credit in advance the full amount. You don t have the option to take it as a refund and to really work with clients to understand the importance of reporting changes in income to the market place, the importance of filing a federal tax return and then submitting that information to ADAP. I will end there for questions. Thanks so much Amy, we are actually going to take questions for the whole webinar in just a minute. Before we do that, there s just a couple of things I want to tell folks. First of all there s a ton of great questions coming in so what we ve decided to do is to actually run over a little bit. For those of you that can stay on to hear the answers, that would be great please stick around. For those of you that are unable to stay on the line because you have another appointment coming up, we will be sending out a summary of all the questions and answers and again the webinar will be 16

17 archived. With that let s just go through a couple of other quick things and then we will go to questions. First of all we want to let you know that the all of the HIV AIDS bureau policy is related to the ACA or posted online so we are going to chat that link to you right now. You can read the policies for yourself or listen to the webcast and one webcast you may find particularly helpful is from this past July. It walks through policy clarification notices including 1401 which Amy was talking about just a few minutes ago. We also want to let you know, that there s a webinar coming up very soon on Tuesday December 16 th. From 1:30 to 3:30 Eastern Time about premium tax credits and the individual shared responsibility payment also known for the fee for not having coverage. On this webinar, the IRS is going to provide HRSA grant fees with information about premium tax credit The reconciliation process for advanced premium tax credit, individual shared responsibility payments and navigating new and updated IRS tax forms including the 1040 and form HRSA is also going to provide more tailored information for Ryan White HIV AIDS program grantees that provide premium, premium assistance to clients who receive advanced premium tax credits from the health insurance market place. We don t have a registration link for that yet, it s coming soon but stay tuned and then in the meantime, please mark your calendar and save the date. We also wanted to let you know that, there s a No looks like we ve had some slide issues come up, I m not really sure what s going on but I m just going to put it on our question slide right now. We do have a 2015 plan renewal of webinar archive from November 12. We would encourage any of you that didn t have a chance to listen into that, to go ahead and check it out, we are going to chat the link out to you on that right now. We explain 2015 plan renewals in details the whole process and introduced our renewal flow chart tool which goes through it in a very simple and clear way along with some enrolment tracking checklist. We also walked through some of our other tools and culturally confident strategies for engaging eligible clients that are not yet enrolled. Again that webinar is archived and you can view it on our webpage under webinars. Also as soon as this webinar ends and evaluation form will pop up on your screen so please complete that form and let us know what you thought of our session, what you learned and also what you think we can do better next time. Let s take a look at some of the questions that have come in. Let s start at the top so the first question we have is, how much of a tax credit can 17

18 someone expect to get? For that one I m going to turn it over to Lori Nichol. Lori: Sure, thanks Mira. For the dollar amount, sorry I m shuffling on my paper because there s an actual chart here that I have. The dollar amount of the tax credits are actually determined based on income as low as the premium and then this notion of there s an unexpected premium contribution that each individual or family is expected to make. That is based on their income so for example, looking at the income ranges and they start with 2% all the way up to 9.5% in terms of the contribution. Looking at the income levels starting at 100% of the federal poverty level, say for an example a family of four that will put them in the income of making $23,500 a year for a family of four. At that level their expected contribution towards their premium is 2% of the premium so that comes to about $39 to $52 is the range that they are expected to pay towards their premium. I must still, I did mean 2% of the premium it s 2% of their income. Looking at that same family of four, if they were making closer to say 90,000 a year for a family of four that puts them at the top end of the FPL range when you are looking at 100 to 400% At 400% or close to that of FPL their contribution towards the premium is expected to be 9½% of their income. I think that s the number that Laura actually used in one of our case studies as well. When you look at what that calculates to, it s about 600 well between 650 and almost 750 a month would go towards their premium so quite a different looking at a contribution of $50 or a contribution of $700 based on their income. Then the way that the tax credit is calculated it s the difference between the premium and what they are expected to contribute. Let s use an example of, if a premium for a family is $1,200 a month, for the family of four, obviously the folks that are expected to only take $50 a month towards a premium, get a much larger tax credit because it s got to make up that difference. They will be looking at a tax credit of 1,150. Where the folks that are at the higher end of the income bracket closer to 400%, that are expected to pay somewhere near $750 a month, their tax credit on paper is going to look much smaller because it s going to make up that difference between the premium so we are looking at about $450 tax credit which just to make up that gap. Hopefully that helps answer the question how much they can be expected to get it, it s really dependent on the income the higher the income the less the tax credit. 18

19 Laura: Laura: Laura: Great thanks Lori, okay let s see what else is coming in. We were talking earlier about the MAGI, HRSA MAGI webinar link issue so we figured out the problem which is at the present, the link works but the presentation itself has actually expired. We are going to check in with HRSA and hopefully get that reactivated and then we ll let you know what we find out about that we ll make sure that s in the FAQ so you can find information about that and hopefully we can get it reactivated. We have a few different questions that are coming in about the case study. Laura if it s okay with you, I m going to talk through these three questions and then maybe you can, jump in and try to provide some clarification does that sound good. That sounds great, thanks Mira. Okay so the first question was Alex s income is $35,000 however it doesn t take into consideration his deduction. Laura, are you going to talk about that one and then also, is the contribution that s calculated for an individual is it their expected gross income for the year? That s another one. Do you, do you want to try to take those Laura? Sure. These are great questions and I wanted to point out that for both Alex and Calvin s income, that income on the slide was based on MAGI which is the modified adjusted gross income and there s a slide in the presentation earlier on, on MAGI. That includes the gross income minus exemptions and deductions. Hopefully clarifies some of the confusion, it does His income Alex specifically; his income of 35,000 did take into consideration the deductions. The contribution question of 9.5% that contribution amount is based on his income per MAGI. That does also take into consideration exemptions and deductions, I hope that helps clarify. Thanks that s, that s great so I think there was another questions and I m not sure if you already answered this Laura about whether we have enough information, to make the determination about Alex s income without taking into consideration his deductions. We wouldn t, I mean for Alex specifically that income was taken into consideration, deductions it was based on MAGI and with any client, the income for your client you would want to know what that income is based on MAGI because that s what the eligibility is determined I m sorry, that s what eligibility determination is based on, is that MAGI calculation. Okay great. We have another question that s come in that says, as of this open enrolment season which started November 15 th, the person asks, they have, they ve renewed clients for 2015 insurance but they, but no 14 19

20 digit number was used and none of the clients had received letters do they need to redo it? I m going to ask Lori to take that question. Lori: Sure I think it s a great question and I am not an expert in that, I have not actually gone into this to myself and enrolled or renewed a new client personally. My understanding is that, well two things maybe going on, my understanding is that 1115, may have been just a little bit too soon, I think the letters may have gone out around that time so folks may have actually gotten their letters since then. To really get up the crust of the question which is, if they didn t have a letter and they didn t have that 14 digit number do they have to redo their renewal and I believe that the answer is no. Particularly if they are renewing in the same plan, all the information are in there. I think what the 14 digit number helps with is pre-populating some of the information on the insurer so that the person who s looking at the plan and they are considering reenrolling or maybe enrolling in another plan that that 14 digit number helps them to be able to pull up all the information that they need to make that decision. Long winded answer thing, I do not think that the application needs to be redone though it s very, very helpful if folks do have that letter. I don t think that if they didn t have a letter by November 15 th that may not raise any high red flag but hopefully they got a letter since that point in time. Thanks Lori and we ll verify that before we send out the FAQ document just to make sure we do have some folks working with us that have very up to date information about that. Alright so the next question we have is, actually I wanted to let you all know, that we did get a link the registration link for the upcoming IRS and HRSA webinar has been released. Someone kindly chatted that to us just a moment ago. We are going to chat out that link right now, you just need to know that there s no registration process that s just a link that you are going to click on at the time of the call. You can just grab that link and setup your own appointment for now and then also you ll get, you will get some information about the details of that call in case you forgot to make a note of them. You can take a pick in your chat box for that right now. Then our next question is in the case studies had both tax credits been applied to their cases or were those monthly premium amount? Are those the correct monthly amounts before tax credits? Lori do you mind taking that as well? Lori: I think I can, I m not sure if I really understand there s a couple of questions in there. As Laura mentioned earlier so the monthly amount that and maybe if you can pull up like you said is again Laura. The monthly 20