This year, for the first time, consumers who have been getting Patient Protection and Affordable Care Act (PPACA) health insurance subsidies were supposed to file tax returns documenting their use of the PPACA premium tax credit and PPACA cost-sharing reduction subsidies.
Consumers who got their coverage, and their subsidies, from the public exchanges managed by the U.S. Department of Health and Human Services (HHS) were also supposed to be telling the exchanges, within 30 days, about any events that might have affected their eligibility for coverage.
Now, the Centers for Consumer Information and Insurance Office (CCIIO) has come out with the procedures it expects to use to move forward for the 2016 open enrollment period when exchange users seem to be earning too much to qualify for PPACA subsidy programs, have refused to let the exchange system check their tax return information automatically, or have failed to file tax returns documenting PPACA subsidy use.
CCIIO is an arm of the Centers for Medicare & Medicaid Services (CMS), a major HHS division.
CCIIO oversees the PPACA exchange system and other HHS programs created by PPACA that affect the commercial health insurance market.
The 2016 open enrollment period is supposed to start Nov. 1, 2015, and end Jan. 31, 2016.
An HHS-run exchange, or “marketplace,” will send a MOEN to any 2015 PPACA exchange application filer in a family or household that has exchange plan coverage and has not arranged to cancel all of the exchange coverage. The MOEN will include extra premium tax credit and cost-sharing reduction information for exchange users who have been using PPACA subsidies. The MOEN will also include special content aimed at four groups at risk of facing serious re-enrollment problems.
The new “annual eligibility and re-enrollment” guidance will have a direct effect only on the HHS-run exchanges, but it could have an indirect effect on how state-based exchanges handle eligibility re-determinations.
From the look of the guidance, the MOENs may be complicated enough to create a flurry of business for agents who can help consumers figure out the MOENs.
For a look at what will happen to four groups of 2015 exchange plan users facing potential 2016 re-enrollment crises, read on.
1. Special notice group
These are 2015 exchange plan enrollees who are getting insurance subsidies, let the exchange check their tax information automatically, and look as if they’ll be swimming in money in 2016, because they now appear to have income over 500 percent of the federal poverty level.
If members of that group fail to contact an exchange and update their information, the exchange will try to re-enroll them in 2016 coverage automatically, if that’s possible, without providing any PPACA coverage subsidies.
See also: 10 PPACA exchanges with upmarket appeal
2. Income-based outreach group
Members of this group are exchange users who have coverage subsidies and look as if their household has income under 100 percent of the federal poverty level, or over 350 percent of the federal poverty level, or the exchange can get no updated tax return information when the exchange contacts the Internal Revenue Service (IRS).
The MOEN for people in that group will note that it’s particularly important for people in that group to contact the exchange.
See also: PPACA ad blitz begins
3. Opt-out group
Members of this group are 2015 exchange users who are getting subsidies but did not give the exchange permission to get updated tax return information from the IRS.
The MOEN for people in this group will warn that, unless recipients provide updated tax return information and choose a plan by the deadline for signing up for 2016 coverage, the exchange will re-enroll the recipients in exchange plan coverage without providing any PPACA subsidies.
4. Did not reconcile group
Members of this group are people who received premium tax credit subsidies in advance in 2014 and failed to file a tax return this year to reconcile the amounts they should have received with the amounts they actually received.
The MOEN will tell those people that they must file tax returns and go through premium tax credit reconciliation, then go to the exchange for a new eligibility determination, before they can sign up for new exchange subsidies. Otherwise, the exchange will re-enroll those people in exchange coverage for 2016 without providing subsidy help.
H&R Block has suggested that there may be a large block of people receiving exchange plan subsidies who have failed to file tax returns, possibly because of confusion about how PPACA works, or how tax filing works.