My First "Clawback Casualty"

[Yagents]

This is a story about the lessons of the 400% Clawback cliffs and the IRS.

Mr's client gets a 2014 APTC of about $300/mo, and pays the remaining $300.

We renew for a new plan in 2015 with $400 APTC and $300 premium.

Calls today, and says her income in 14' will be at 401% federal poverty level and above, with certainty, and no deductions to be found.

She "wants out of Obamacare", as she knows (because I warned her), she will owe the $3600 of 14' clawback, and she doesn't want another clawback in 2015/16. And, since she can't afford $700 full premium..... She's going uninsured for 10 months until medicare now. Such a success story for ACA.

Stay tuned for more clawback cartoons............coming to your town soon.

 

[AllenChicago]

The Advance of Premium Tax Credit is indeed a callous and foolish system. Lots of Taxpayers who received APTC in 2014 will soon know what agents on Advance Commissions often experience.

A client started a new job in October and reported to the Marketplace that his income is suddenly too high for the APTC. The APTC was terminated. Since this client's 2014 (family of 4) income will likely now be over $95,000, will he have to repay all APTC $$$ received from Jan2014 thru Sep2014? After all, he did report "promptly" to the Marketplace, like they advise.

He's a CPA and is asking ME this question. duh.

 

[yorkriver1]

Last night a HC.gov rep told me about the surprising experience he had. A small business owner is calling each month to adjust the APTC so no taxes will be owed next year.
An exception. I may over explain at times, but I want to drive it home that the amount paid each month is not in any way a guaranteed premium.

 

[somarco]

And the Obamacrap groundswell continues. Not just those on the cusp but a high percentage of those who received subsidies.

Anyone care to guess how many will eventually be impacted by clawback?

30%? 50%? 70%?

 

[russelltw]

http://www.irs.gov/pub/irs-dft/f8962--dft.pdf
My understanding it will be a month to month situation, according to this draft IRS form.

Tax time will be interesting here. I have of several agents telling people that the spouse's income does not matter or spouse's group coverage does not matter.

Even heard from another agent - his client (who makes 90k+) was written by another agent. The other agent got the client a "big subsidy" and told client the government wasn't going to check anyway, so why not get a big subsidy....

News stories will pop up starting mid February...

 

[Justin Bilyj]

Sbo clients of mine shy away from the obamacare like a loaded gun ready to go off. I showed a family of 3 a subsidy plan that could save them 300 a month in premiums and he said No way, wanted nothing to do with obamacare.

On the flip side, its outrageous that my off exchange clients can't claim a tax credit like a subsidy eligible person would be able to. Im surprised no one has sued on that basis.

 

[HealthGuy]

YAgents is so right on...The tax time carnage of self employed do it yourselfers is going to be EPIC...The IRS has the long arm of the law behind them and nobody is going to get away eventually with gaming this system. Its Clawback Comedy time soon...gonna be fun to watch the carnage.

 

[somarco]

Agents aren't the only ones promising the moon. My guess is there will be more (higher percentage) of issues with those that got help from navigators and social workers pretending to be experts.

 

[FLM2]

Every time I show the 'cliff' to a client by toggling their income by $1 and watching a subsidy go from $200+ to $0 they all gasp and go 'that's crazy!'

All we can do as informed brokers is show this to those who are in the upper ranges of the subsidy scale; it's not an issue in the lower ranges as there are boundaries to the clawback and those who fall below the 100% FPL level in the non-Medicaid expansion states (and there will be enormous numbers of them) won't be losing anything.

 

[G.Gordon]

Those close to the cliff with little to gain (<$100/mo) by going on exch. I encourage to stay off exchange and not risk it. There is more to the exchange for them than just claw back risk, they also lose three major medical centers in our area.