California

October 15, 2018 – January 15, 2019

Colorado

November 1, 2018 – January 15, 2019

Connecticut

November 1, 2018 – December 15, 2018 (not extended)

District of Columbia

November 1, 2018 – January 31, 2019

Idaho

November 1, 2018 – December 15, 2018 (not extended)

Maryland

November 1, 2018 – December 15, 2018 (not extended)

Massachusetts

November 1, 2018 – January 23, 2019

Minnesota

November 1, 2018 – January 13, 2019

New York

November 1, 2018 – January 31, 2019

Rhode Island

November 1, 2018 – December 31, 2018

Vermont

November 1, 2018 – December 15, 2018 (not extended)

Washington

November 1, 2018 – December 15, 2018 (not extended)

June 11, 2018

The December 2017 tax law’s effective repeal of the requirement to have health insurance is well-known, but other less-discussed provisions of the law will have a modest impact on the calculation of modified adjusted gross income (MAGI) for Medicaid and premium tax credit eligibility. Though most changes take effect this year, they likely won’t impact tax credit reconciliation for people who projected their 2018 income under the prior-law rules.

↓ Download PDF

Dependent Filing Requirement Raised

The most significant change raises the income at which a dependent must file a tax return. Fewer dependents will need to file, meaning more families can exclude a dependent’s earnings from their household income. For some, lower household income will result in newly qualifying for Medicaid or receiving a higher premium tax credit.

Starting this year, a single dependent under age 65 will be required to file if earned income is greater than $12,000, compared to $6,350 in 2017. A dependent also must file if unearned (investment) income exceeds $1,050 (unchanged by the new law), or if gross income is higher than some combination of earned and unearned income. This change is effective for 2018 and sunsets after 2025.

Income and Deduction Changes

The new law takes alimony off the tax return altogether for newly divorced or separated couples. Previously, the spouse paying alimony would deduct those payments and the spouse receiving alimony would count them as income, both affecting MAGI. Starting with judgments after January 1, 2019, neither spouse will include alimony on the tax return. People whose divorce decrees were finalized prior to that date can choose to adopt this new rule in a modification of their current agreement.

Student loan debt that is forgiven due to the death or disability of the student is no longer included as income, lowering MAGI for the affected students. Moving expenses are no longer deductible, except by members of the Armed Forces. Both provisions sunset after 2025. The tuition and fees deduction, which can reduce income by up to $4,000 for people with higher education expenses, expired at the end of 2017 and was not extended in the tax bill. However, Congress has renewed it retroactively in the past and may do so again.

Household Determination Unchanged

The rules about who can be claimed as a dependent don’t change, even though personal exemption deductions are eliminated. While taxpayers will no longer subtract a per-person amount from adjusted gross income on the tax return, dependents will still be determined according to the usual rules. Household size for Medicaid and marketplace eligibility will remain the same.

Increased Exemption Eligibility

One non-MAGI change is noteworthy. Fewer people will pay the shared responsibility fee in 2018 (before it’s repealed in 2019) because tax-filing will be triggered at a higher income, qualifying more people for an exemption. For example, a single person doesn’t need to file if income is less than $12,000 in 2018, compared to $10,400 in 2017. However, people who are married filing separately now must file regardless of income so won’t be eligible for that exemption.

Additional Resources

Reference Guide: Yearly Guidelines and Thresholds | View reference guide

Health Assister’s Guide to Tax Rules | View guide

Webinar: Determining Households and Income for PTC and Medicaid | View webinar

Defining Income and Households Resource List | View resources

↓ Read the final rule

↓ Read the guidance on hardship exemptions 

For an overview of the rule changes, see our paper, “Health Care Rule Changes Will Harm Consumers,” detailing how these changes will weaken benefit standards, likely harming people with pre-existing conditions; raising new barriers for people who want to enroll in health coverage; and reducing accountability for insurers and transparency for consumers.

Changes from the final rule and additional guidance include:

Altered rules for navigator programs.  Under the rule, marketplaces are permitted to have just one navigator entity serve the entire state. In addition, the rule allows navigators to not have a physical presence in the state they are paid to serve and no longer requires that one navigator group in a service area be a consumer-focused nonprofit organization.

New requirements for verification of income.  The rule requires individuals to verify their income if their attested income is above the poverty line but data sources suggest that income is below the poverty line. This will make it harder for eligible individuals with fluctuating poverty-level income to access much-needed financial help to afford coverage.

Expanded hardship exemption.  Effective immediately, new guidance expands the situations in which people can receive a hardship exemption to include people who:

• Show that a lack of choice when there is only one issuer in their area “precluded” them from obtaining coverage;
• Cannot buy an affordable plan that does not include abortion coverage, which is contrary to the individual’s beliefs;
• Have no qualified health plan in their area (a circumstance no marketplaces have ever experienced); or
• Experience personal circumstances that may qualify as a hardship, such as when available QHPs don’t cover needed specialty care.

New special enrollment period (SEP) for loss of pregnancy-related coverage provided through CHIP.  The rule adds an additional SEP for the loss of coverage provided through the Children’s Health Insurance Program (CHIP) “unborn child” option, which only covers pregnancy-related services and is not considered minimum essential coverage. This SEP will go into effect on June 18, 2018.

Removes requirement to provide adequate notice to those who fail to reconcile APTC.  People who receive APTC are required to file a tax return and reconcile the tax credit, or they risk losing financial assistance when they re-enroll. Current rules require that the Marketplace must first provide enrollees with information about failure to reconcile, giving them a chance to correct the record if they in fact reconciled or remedy the situation by filing a tax return, but the new rule removes that requirement to first send notice directly to the tax filer before discontinuing APTC.

Allows states and insurers to scale back benefits.  Beginning in 2020, the new rule changes the standards for how states create a benchmark plan to establish the minimum standard for the ten essential health benefits offered in that state and how insurers comply with them, opening up new ways for states and insurers to scale back coverage of services that are costly but critical to people with serious health needs.

There are additional changes in the rule including weakening the risk adjustment program by letting states shrink risk adjustment transfers by up to 50%, reduced transparency of insurance premium rates, and diminished standards for the “medical-loss ratio” requiring insurers to spend at least 80% of what they collect in premiums on medical care and improving healthcare quality. For more detailed information on the harmful changes in this rule, please see our paper, “Health Care Rule Changes Will Harm Consumers.”

Eligibility for a Special Enrollment Period

December 18, 2017

People enrolled in 2017 Marketplace plans that are discontinued for 2018 are eligible for the special enrollment period (SEP) for people losing minimum essential coverage. People eligible for the loss of coverage SEP have 60 days before or 60 days after the date their previous coverage ends to enroll in or change plans. For people whose 2017 plans are discontinued for 2018 that date is December 31, 2017.

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Who is eligible for this SEP?

Anyone whose 2017 Marketplace plan was discontinued for 2018 is eligible for an SEP, including:

• People enrolled in 2017 plans with insurers who are no longer offering coverage in their area.
• People whose 2017 plan is being discontinued but their insurer is still offering other plans in the Marketplace.

Everyone whose plan is discontinued is eligible for the SEP regardless of whether or not they are auto-enrolled into a new plan for 2018, or they actively select a new plan for 2018.

Everyone enrolled in a 2017 plan should have received a notice from their insurer detailing whether or not their 2017 plan would be offered in 2018. People with 2017 Marketplace coverage fall into one of the following categories:

• Their plan is no longer available and no other plans are available through that insurer. These consumers will get a notice from their issuers indicating that their plan is not being offered the following year. No information about a new plan will be in this notice, but the Marketplace will generally auto-enroll these individuals in a new plan with a new insurer if they don’t return to the Marketplace. The new plan will send information to the consumer about how to effectuate their coverage. These consumers are eligible for an SEP.
• Their plan is no longer available and the insurer will auto-enroll the person in a new plan. People will get a notice from their insurer indicating that their plan is not being offered the following year, and that they will be automatically enrolled in a new plan if they don’t return to the Marketplace and select a different plan. These consumers are eligible for an SEP.
• Their plan is available in 2018 and the insurer will auto-enroll the person into the same plan. People will get a notice detailing any changes to their plan for 2018. People can choose to remain enrolled in this plan for 2018 or choose a new plan during open enrollment. They are not eligible for an SEP — even if there are significant changes to the provider network, the cost sharing structure, or other features of their plan — because their coverage was not discontinued.

How do eligible consumers activate this SEP?

Consumers can activate this SEP online on HealthCare.gov or by calling the marketplace call center and indicating they have lost coverage just as they would if they lost other coverage from another source such as Medicaid or employer sponsored insurance. Two questions on the application ask if anyone in the household lost coverage in the past 60 days or if anyone is losing coverage in the next 60 days. Depending on whether it is before or after December 31, 2017, consumers should answer one of these questions affirmatively, and they should put December 31, 2017 as the date they are losing or have already lost coverage. This will trigger an SEP and allow consumers to enroll in a new plan. Consumers have until March 1, 2018 (60 days after December 31, 2017) to activate this SEP and choose a new plan. The coverage effective date of the new plan will be the first day of the month following plan selection. Eligible consumers should use this SEP as soon as possible to avoid potential gaps in coverage or being auto-enrolled in a plan that does not meet their needs.

When the discontinued plan was a Marketplace plan offered through HealthCare.gov, consumers should not have to submit documentation verifying the loss of coverage. However, if a person is asked to submit documentation, she can use the notice received from her insurer to prove that her coverage was discontinued.

States and State-Based Marketplaces that do not rely on Healthcare.gov have some additional flexibility related to several provisions of the rule.

↓ Read the final rule

Overview of changes to SEPs include:

Prior coverage requirement for Marriage SEP.  To be eligible to enroll in coverage or change plans using the SEP triggered by marriage, at least one spouse must have had at least one day of minimum essential coverage in the 60 days prior to the marriage.

Restrictions on plan selection for current Marketplace enrollees who are eligible for an SEP.  If a person already enrolled in Marketplace coverage is eligible for an SEP, they can only use that SEP to change plans within the same metal level as their current plan, except in some limited cases. (This is in contrast to the current rules, which permit enrollees experiencing an event that triggers an SEP, and their dependents when applicable, to change to any Marketplace plan at any metal level.)

In addition, under the new rule, if an enrollee gains a dependent or gets married, that enrollee generally cannot change plans. The enrollee can either add the new dependent or spouse to his or her current Marketplace plan, or enroll the new dependent in a separate plan. In rare cases where an enrollee’s current plan does not cover dependents, the enrollee and dependent can choose to enroll in a new plan together within the same metal level as the enrollee’s current plan.

Pre-enrollment verification for SEPs.  Beginning in late June 2017, some people enrolling through an SEP will not be able to effectuate their coverage until the Marketplace verifies their eligibility for an SEP qualifying event.

The process will be phased in over the course of the year and will apply to the most common SEPs, including loss of other coverage and permanent move, when the rollout is scheduled to begin June 23, 2017. Pre-enrollment verification will eventually apply to all people newly enrolling in Marketplace coverage and to all categories of SEPs.

• State-Based Marketplaces that do not use Healthcare.gov are not required to conduct pre-enrollment verification of SEP eligibility.

Overview of other changes include:

Shorter open enrollment for 2018 coverage: Open enrollment will run from November 1, 2017 through December 15, 2017, allowing only 45 days to apply for and select a plan for 2018.

• State-Based Marketplaces can have a longer open enrollment period by adding a supplemental special enrollment period.

Change to guaranteed availability rules regarding prior premium debt:  Allows an insurer to refuse to enroll a person who owes back premiums to the insurer from the past 12 months, unless and until the person pays the prior premium debt. This change is subject to state law, which may prohibit this practice.

Additional Resources

Special Enrollment Period Reference Chart | View resource

Webinar: Overview of Changes in the Marketplace | View webinar

Webinar: Changes to SEPs and Pre-Enrollment Verification | View webinar

Families that include children or other tax dependents receiving Social Security benefits who applied for health coverage through Healthcare.gov before April 17, 2015, may have been affected by a mistake in how their Social Security benefits were treated in calculating their eligibility for Marketplace coverage. The Marketplace is now sending notices to families who may have been affected by this error encouraging them to return to the Marketplace and get a corrected eligibility determination.

Who might be affected?

All households that include dependents who receive Social Security benefits that applied for coverage through Healthcare.gov before April 17, 2015.  This group includes families that are not currently enrolled in a Marketplace plan.  It does not affect families with members who receive Supplemental Security Income (SSI) benefits.

What do the notices from the Marketplace say?

The notices encourage these families to come back to the Marketplace to get a correct determination of eligibility.  The families include people who are currently enrolled in Marketplace plans as well as people who are not enrolled.  While consumers already enrolled may want to take different steps in response to the notice than those who are not enrolled, the notice does not include different instructions for the two groups.

How do consumers correct their eligibility determination?

Consumers can get a corrected eligibility determination by calling the Marketplace Call Center and reporting a “life change.”  Though consumers do not have to have experienced a life change, going through the process of reporting a life change allows a consumer to receive a new eligibility determination that correctly counts the Social Security income.  This will result in a recalculation of the household’s premium tax credits (PTCs).

How will an updated eligibility determination affect consumers currently enrolled in a Marketplace plan?

In some cases, the new determination will mean families can get an increase in their PTCs.  In addition to increased PTCs, consumers may also be determined newly eligible for cost-sharing reductions (CSR) or be determined eligible for a different level of CSR.  (NOTE: Consumers must be enrolled in a silver plan to receive CSR.)

Can consumers change plans when they update their eligibility determination?

Yes, the notice that consumers receive from the Marketplace triggers a special enrollment period (SEP) that will allow consumers to change plans if they wish.  If a consumer is newly eligible for CSR, but is not enrolled in a silver plan, they may use the SEP to switch and enroll in a silver plan.

It is important to note that consumers who change plans will have all cost-sharing charges (such as the deductible and out-of-pocket maximum) reset to zero.  In other words, any costs that have already been counted toward their deductibles will be wiped out.  If consumers stay in the same plan with higher PTCs or new/higher CSRs, the cost-sharing charges will not reset to zero.

Can the recalculated amount of PTCs and level of CSR be applied retroactively?

Yes, consumers can choose to apply their recalculated amount of PTCs or level of CSR retroactively to the date of the original incorrect eligibility determination for 2015 coverage (as far back as January 1, 2015).

Will consumers lose PTCs they would have been eligible for if they do not apply the PTCs retroactively to their 2015 coverage?

No, when consumers reconcile their PTCs at tax time, they will be credited with any underpayment of PTCs that they were eligible for during the coverage year and didn’t receive in advance.

What do consumers do if they are not currently enrolled in a Marketplace plan?

Some consumers who were affected by this error may not have enrolled in a plan or may have enrolled in a plan and ended their coverage some time during 2015.  Even if a consumer affected by the system issue is not enrolled in a plan, he can contact the Marketplace Call Center and receive a new eligibility determination with the correct eligibility for PTCs and CSR.  Consumers can then use the SEP to enroll in a plan.

Consumers can choose to have coverage begin retroactively, but they will be responsible for paying all premiums and applicable cost-sharing charges for all retroactive coverage months.

What if a consumer’s corrected household income is within the eligibility range for Medicaid or CHIP?

Some consumers who update their application may now be found to have income in the Medicaid or CHIP range when their eligibility is recalculated without counting their dependents’ Social Security income.  This is especially true for individuals with incomes at the lower end of the subsidy scale and those who have more than one dependent who receives Social Security benefits.  If consumers appear to be eligible for Medicaid or CHIP based on their recalculated income, their cases will be sent to their state Medicaid or CHIP agencies, and they may be required to submit additional information to complete the eligibility determination for those programs.  Consumers can choose to stay in their Marketplace coverage pending determination of their Medicaid eligibility, but they must remember to terminate coverage from the Marketplace plan once they are enrolled in Medicaid or CHIP coverage.

What happens if a consumer’s corrected household income drops them below the poverty line and into the coverage gap in a Medicaid non-expansion state?

Unfortunately, updating the eligibility determination will result in some consumers falling into the coverage gap in states that have not expanded Medicaid.

What if a consumer does not respond to the notice encouraging him to return to the Marketplace?

There is no requirement that consumers come back to the Marketplace and update their eligibility determination in response to this notice.  (If a consumer has otherwise experienced a change in income, the consumer does have a responsibility to report those changes.)  Consumers who are satisfied with their Marketplace plan choice and current subsidy amount can choose to wait to reconcile their PTC amount when they file their taxes.  Any PTC that a person was eligible for but did not receive in advance will be credited to the consumer at tax time.  However, if a person should be receiving a higher cost-sharing reduction, the person will forgo the increased CSR for the remainder of the year.

If a consumer’s actual annual income ends up below the poverty line at tax filing, a special rule applies and as long as the Marketplace estimated at the time of enrollment that a consumer’s income would be between 100 and 400 percent of the poverty line and he was otherwise eligible for premium tax credits, he won’t have to pay back the advance payments he received during the year, and the consumer’s actual annual income will be used when reconciling the PTC.

Did this error affect 2014 and 2015 coverage?

The error did affect both coverage years, but updating an eligibility determination will only affect coverage for 2015.  Those who received an incorrect amount of PTCs in 2014 because a dependent’s Social Security benefits were erroneously counted should have been credited with the correct amount of PTCs when they filed their tax returns and reconciled their PTCs for the 2014 coverage year.

If a person affected by this error was auto-renewed into 2015 coverage based on their 2014 eligibility determination and has not updated his application or reported a life change to the Marketplace, then the error is still affecting his eligibility determination.

What caused this error to occur?

Generally, Social Security benefits are counted towards household income in determining financial eligibility for insurance affordability programs.  However, when the benefits are received by children or other individuals claimed as tax dependents, the benefits are only counted if the dependent is required to file a tax return based on her own income.  (For example, the 2014 thresholds for when tax dependents are required to file a return is if they have $6,200 in earned income or $1,000 in unearned income—Social Security benefits do not count towards reaching these thresholds.)  As we understand it, Healthcare.gov was originally programmed to include Social Security benefits in the determination of whether a dependent had a tax filing requirement.  This resulted in Healthcare.gov making incorrect eligibility determinations for health insurance affordability programs, because the Social Security benefits were erroneously included in household income.  The system error was corrected on April 17, 2015.

Did this error only occur for people who applied for coverage through Healthcare.gov?

The specific error and related notice is applicable to people who applied for coverage through Healthcare.gov.  However, we don’t know if all state Medicaid, CHIP and Marketplaces are counting Social Security benefits of dependents accurately.  Because this is a complex income counting rule, it would be wise to inquire whether or not your state agencies are implementing this policy accurately.

ALL HANDS ON DECK NEEDED TO HELP CONSUMERS RESOLVE INCONSISTENCIES

Starting in late July or early August, subsidies could be reduced or terminated for hundreds of thousands of consumers who enrolled in health coverage through www.healthcare.gov.  To avoid having their subsidies go down or end, consumers must send in documents to verify their income and/or citizenship or immigration status.  Navigators, certified application counselors and others helping consumers with eligibility and enrollment in states using the Federally Facilitated Marketplace (FFM) can play a critical role in ensuring that consumers can maintain their coverage.

Click here for more information on the issue, and to find out how you can help.