Here are the numbers: Bronze Plan is $400, second lowest Silver Plan is $337. I am looking for penalty relief. Instructions say use bronze plan minus highest premium tax credit. If I use $400 T/P qualifies for penalty relief, if I use lowest premium possible, T/P does not qualify. I assume I can just follow the instructions and get the penalty relief but I do not feel good about it.
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Is your taxpayer a tobacco user?
The "unaffordable" exemption is based on the lowest cost of insurance. In most States, tobacco usage increases that cost.
The SLCSP is a 'baseline' to determine the Premium Tax Credit. Tobacco use does NOT affect this 'baseline' amount (the household size could be different too). In other words, your client may not actually be able to receive insurance for this price. The SLCSP is only used as a number to determine the Premium Tax Credit. Never directly use the SLCSP amount for the 8.05% exemption.
So you need to go through the worksheet (page 11 of the instructions of Form 8965) to determine what the Premium Tax Credit would be (Lines 2-11) using the SLCSP. Then you subtract that from the cost of the Bronze ($400). That final number (after the Premium Tax Credit they could have received) is what you multiply by 8.05%.
Does that help clarify things at all? -
Yes, in the sense of confirming what I went through, no tobacco use. It just does not make any sense that the silver plans (lowest & second lowest) are cheaper than the bronze plan. I am sure it's a different provider.Comment
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I agree w/ Bill that tobacco use could make the Bronze more than SLCSP. There can be a wide range between providers, but it doesn't make sense that the provider that had the SLCSP did not have a bronze plan that was less. This link lets you see all the 2015 plans rather than going through the tax tool link, and it may shed some light. https://www.healthcare.gov/see-plans-2015/Originally posted by Gretel View PostComment
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Does the SLCSP use a different family size than the Bronze? The SLCSP does not include family members who are eligible for things like Medicare, Medicaid, VA, etc..
If not, that is really weird why the SLCSP would cost more than a Bronze (with no tobacco use). You've double checked the numbers, right?Comment
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Mystery
indeed. I used the link provided and in the end got the info for both plans, at least tripple checked and it really threw me for a loop. I assume I can rely on the printed results if ever questioned.Comment
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Follow up
I decided to get some more peace of mind and called the market place. The lady explained to me that because of cost-sharing subsidies that are only available for Silver plans it is not uncommon that a Bronze plan is higher. I went back to the calculator just to see what happens if I pretend none of the family members have access to health insurance. Before it was just coverage for one person. With family coverage the Bronze plan was lower then the Silver plan. Very interesting but also very confusing and scary.Comment
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Like many Marketplace representatives, I don't think that person knew what she was talking about.
Unless things have changed from last year, cost-sharing reductions don't affect the price of a plan. They reduce the deductible, out-of-pocket maximum, coinsurance and/or co-pays.
Even it they did reduce the price, the SCLSP would baseline would NOT be affected by such things. Income does not affect the SCLSP that is used to figure the credit, so cost-sharing reductions (which are based on income) would not affect it either.Comment
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OK, but something did unless all calculations on their website can't be trusted. You seem to be so sure. Would you trust their online numbers?Comment
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That is weird.
Just to confirm: When you originally look up the Bronze and Silver plans, they were BOTH for ONE person, is that correct?
Or did the Bronze cover more people? The Bronze lookup number includes people who are eligible for Medicare, Medicaid, VA, etc., but the Silver plan lookup does not. So the Bronze lookup could have more people covered under the plan, which would explain the higher price.Comment
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When using this tax tool: https://www.healthcare.gov/tax-tool/#/ and telling the system to claim an "affordability" exemption, in the end it gives you both premiums. It's one and the same process.Comment
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Yes, but one of the screens asks if a person is eligible for Medicare, Medicaid, or Chip.
After entering the birth-date of a family member, the next screen asks if that person was eligible for employer insurance. The screen AFTER that asks about Medicare, Medicaid, Chip or employer insurance. For any family members did you check any of the boxes on the "Medicare, Medicaid, Chip" screen?Comment
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Da-da
Thanks for bearing with me, TaxGuyBill. I went back and only entered the one person of the household that is eligible for Marketplace coverage. Now the Bronze plan is $100 cheaper than before. This tax tool is worthless, other than a single person look up?? Do you know why in the world the Bronze plan includes a person that is not even eligible because employer plan/and or Chip is available?Comment
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You've got me confused. Let's try this:
How many people are in the Household? For EACH person, answer these questions:
Was the person eligible for another exemption?
Was the person eligible for employer insurance?
Did that person actually have employer insurance?
Was the person eligible for Medicare, Medicaid, CHIP, VA, etc.?
Did that person actually have Medicare, Medicaid, CHIP, VA, etc.?Comment
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Sorry, all these questions were answered the first time around for all 3 - Household consists of Dad, Mom and one child. Dad has employer insurance for himself only but did not sign up, child is covered by Medicare, Mom does not have any insurance available to her. After your last e-mail, I went back and only put her data in. The Silver plan never changed - I tried other scenarios as well, but the Bronze plan was now $100 cheaper with only her. I believe I am good but I am tempted to not bother with the 8.05% exemption unless the actually went to the market place and have the premium they would have to pay for the benchmark plans available.Comment
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