Monday, February 18, 2013

Affordability Clarification: When Can Dependents Qualify for Premium Subsidy in an Exchange

Last week the IRS issued final regulations on when an employer-sponsored health plan could be considered affordable. The statement from the Federal Register reads:

 The proposed regulations provided that, for taxable years beginning before January 1, 2015, an eligible employer sponsored plan is affordable for related individuals if the portion of the annual premium the employee must pay for self-only coverage (the required contribution percentage) does not exceed 9.5% of the taxpayer’s household income. While several comments supported this rule, other comments asserted that the affordability of coverage for related individuals should be based on the portion of the annual premium the employee must pay for family coverage.

These final regulations adopt the proposed rule without change.

While we were always confident that the affordability measurement would be based on self-only coverage there was questions related to the eligibility of "related individuals" i.e. dependents of employees.   These regulations make it clear that "related individuals" will not qualify for a subsidy if the employer sponsored coverage is determined to be affordable based on the contribution for self-only coverage. This also assumes the plan meets the requirements for actuarial value.   The regulations also clarify that:   for purposes of applying the affordability exemption from the shared responsibility payment in the case of related individuals, the required contribution is based on the premium the employee would pay for employer-sponsored family coverage.

This means that if citizens want to apply to be exempt from paying the "shared responsibility payment" (i.e. penalty for not having qualified insurance coverage in 2014) they will apply using the family contribution for the employer sponsored coverage. This does not put the employer at risk for any type of penalty.

To view the Federal Register click here.

Tuesday, February 12, 2013

North Carolina will not set up health insurance exchange: Governor

North Carolina will not work with the federal government in setting up a health insurance exchange, the state’s governor said Tuesday.


“There has been a lack of preparation within state government during the past year to build necessary and reliable systems to implement a state exchange,” Gov. Pat McCrory said in a statement.

Former Governor Bev Perdue had previously stated that North Carolina would particpate in a partnership exchange with the federal government.

To read a full article from Business Insurance click here.





Wednesday, February 6, 2013

NC Senate Republicans Vote to Block Medicaid Expansion

By John Frank — jfrank@newsobserver.com


RALEIGH — Despite last-minute objections from Gov. Pat McCrory, the Republican-led state Senate pushed through legislation Monday evening that will prevent nearly 650,000 residents from getting health insurance and block the state from establishing a health care exchange.

The GOP supermajority used the 31-17 vote to send a message to the federal government that it wants no part of the health care law signed by President Barack Obama, even as other states led by Republicans are accepting the money.Republican Sen. Tom Apodaca, the bill’s lead sponsor, said the measure tells Washington, “if you want to do it, do it the way you want to do it and leave us out of the equation.”

Hours before the vote, McCrory’s administration expressed caution about moving too swiftly, given the unknown financial ramifications. The Republican governor is worried that the legislation may threaten money for the current system that tracks the state’s Medicaid patients, according to a letter his administration sent to Senate leaders.

To read the full story from the Raleigh News and Observer click here