After an individual or family has been approved for a tax credit subsidy to lower their monthly health insurance premium Covered California gives them ninety days to verify their income. If the consumer doesn’t submit proof of income that Covered California accepts the applicant will either be reduced to Medi-Cal or have their tax credit subsidy withdrawn. Molina Healthcare announced they could do nothing for members who lost the tax credit subsidy and they must pay the full premium amount.
No income verification means no tax credits
Many consumers have either forgotten or have found it too difficult to upload income documents to their Covered California accounts for verification. They are spurred into action to get their income verified when Covered California notifies them their Advance Premium Tax Credit (APTC) is being cancelled and they will have to pay the full premium amount. With quick action the APTC can be reinstated for the following month. But that still leaves many families having to scramble to pay a full month’s premium.
Molina Healthcare IMPORTANT INFORMATION
June 18, 2015
Loss of Advanced Premium Tax Credits (APTC)
We are aware that some of our members lost their subsidy and now owe a full month of premium payment(s). Some were able to supply proof needed by the exchange and had their subsidy reinstated, however there is a month or more gap where the government subsidy lapsed, therefore the member is responsible for the full premium during that time. We sympathize and understand that most of our members cannot afford to pay a full month and are therefore skipping that month and trying to pay the following month.
We are receiving a lot of questions asking:
“If the client does not pay the month(s) without subsidy and they pay the following month with subsidy will they be able to use the insurance?”
Unfortunately, the answer is No, they will not. Members must pay their responsible portion of the premium or the policy will lapse. For example:
- Month of May Member’s responsibility after applying the subsidy is $22.50 (member sends in $22.50)
- Month of June Member’s responsibility is the full Premium after subsidy lost is $550.00 (member did not pay)
- Month of July Member’s responsibility after applying the reinstated Subsidy $22.50 (Member sends in $22.50)
In the example noted above, since the member did not pay for the month of June, the $22.50 will be applied to the June premium of $550.00 leaving a balance of $537.50 owed for month of June, and $22.50 still owed for July which will bring it back up to a balance due of $550.00. If the whole balance is not paid, the member will be suspended and will have no coverage until account is brought to current status.
After 90 days the client will be terminated for non-payment, and, unless they have an SEP cannot enroll again until open enrollment starting in November and no coverage till January 2016. Molina will not send the member to collections for the owed amount however; they will still owe that until paid in full.
The member always has the right to file an appeal to the Exchange.
Submitting proof of income can be daunting
This is one of the “learning experiences” with the Affordable Care Act. At least Molina Healthcare went to the trouble to get this information out to brokers so they could assist their clients. Covered California doesn’t necessarily make it intuitive to submit proof of income. When a consumer is initially determined eligible for tax credits through Covered California the Eligibility Results page will list if proof of income must be submitted. Proof of income will also be listed as documents that must be submitted on the Covered California welcome letter.
But when a consumer returns to their Covered California there is no button prompting them to upload income documents. Instead, consumers and agents need to look for a link in the Actions box on the consumer’s home page that says Manage Verifications. Manage Verifications is “geek-speak” for upload documents. Once on the Manage Verification screen, consumers need to click on Submit Verification and look for the blue hyperlink Upload link.
Manage Verification button
The Upload button will take the consumer to the document upload page, see Uploading Documents to Covered California. But uploading proof of income doesn’t mean it will happen overnight. I have seen Covered California take over two months to verify proof of income. For consumers who have lost the tax credit, that would be three months without the subsidy. Consumers can file an appeal to have Covered California reinstate back tax credits: Filing an appeal of complaint with Covered California. A Certified Insurance Agent can also assist in uploading the document from an image snapped with a smartphone or other electronic means.
Given the fact that Covered California has continued to pay the tax credit subsidy to health plans even after the consumer has stopped paying their premium or was moved to Medi-Cal, there is no reason why Covered California can’t help a truly needy consumer, flummoxed by their website, to make back health insurance premiums affordable with retroactive APTC.