Consumers are receiving letter from Covered California that they may lose their subsidy, with vague instructions on how to fix the situation.
Some individuals and families who enrolled through Covered California have received a letter notifying them they are at risk of losing financial assistance in 2016. The letters being sent out include three reasons why a household might lose the premium assistance to lower their monthly health insurance bill. They are also frightening consumers who actually compiled with all the conditions they list in the letter.
You are at Risk of losing financial assistance in 2016
The three reasons a household might lose the premium assistance according to the letter are:
- You may not have filed a 2014 federal income tax return for your household to reconcile the Advance Premium Tax Credit (APTC) used to lower plan premium costs during 2014.
- Your consent to allow Covered California to use computer sources to check your income and family size, including information from tax returns, has expired
- Your household income may be too high
Panic inducing Covered California letters
For my clients who called me in a panic after receiving this notice dated January 20, 2016, they had all met the conditions for continuation of the premium assistance. We had uploaded their 2014 tax return as proof of income as requested by Covered California and we had updated their Consent for Verification. None of the Covered California accounts I researched were anywhere near having an estimated income too high to receive the tax credits. I’m not sure why Covered California is sending out letters to accounts who have actually met all the conditions inducing another level of stress into their lives. The notification number at the bottom of the letter is CCPOL01202016 and this notice was not found in the consumer’s Documents and Correspondence section of their Covered California account.
Federal income tax return
If a family hasn’t filed their 2014 taxes, they obvious need to do it to retain the tax credits. But Covered California should have prevented the household from receiving the tax credits before the automatic renewal for 2016 or new applications during open enrollment. The notice doesn’t inform the recipient how to report to Covered California that they have filed their tax return. There is no place to upload such documentation unless you upload the 1040 to verify income under the Manage Verifications link in the Actions box of the consumer home page. How to upload a verification document to Covered California.
Consent for Verification
If a consumer had not updated their consent for verification at renewal time they had already lost their premium assistance for January. The automatic renewal by Covered California forced the loss of premium assistance. I had to update the consent for several people, some of whom had lost the premium assistance for January. The updated consent did restore the premium assistance but not until February or March for some consumers. Updating the Consent for Verification can be tricky. You not only have to click the link and select the number of years you want to maintain the consent for, you then have to use the Report a Change function to actually apply the updated consent. For more information on this process see: Reporting an Update for Consent for Verification And Covered California tax subsidy will melt away for some families in 2016.
You are making too much money
I’m unclear as to what circumstances would trigger Cover California to notify a family may be making too much money. If the household reported an income change at the time of renewal they would have immediately been notified that they lost the Advance Premium Tax Credits. And if the reported income is accurate, there is nothing the family can do to change it- they will lose the premium assistance. However, it is possible that a household added a new job or income stream without stopping or terminating a job they are no longer employed at. The added income would artificial inflate their income. However, you don’t have to earn over 400% of the federal poverty line in order to be ineligible for the premium assistance. Incomes below 400% of the federal poverty line may still be too high depending on the age of the consumer and where they live. See: Inputs for calculating your premium assistance amount.
Vague letters, lack account specifics
These letters are undoubtedly generating lots of phone calls to agents and Covered California because they lack specifics. Covered California needs to develop a notification system that gives specifics as why the notice was generated. Such as, The IRS has no record of your 2014 tax return. Please provide proof of your tax return by uploading to your account. Or, Your Consent for Verification has expired; please update the consent in order to receive the premium assistance.
Throwing out three different reasons, none of which may be valid for the actual consumer receiving the notice, generates wasted time tracking down the specific issue that needs to be address. Finally, as an agent, I would gladly research and handle some of these issues for my clients if Covered California would just notify me first, or simultaneously, with the consumer.