Q. What income is used to determine the subsidy eligibility?
A. MAGI – Modified Adjusted Gross Income. Generally, your modified adjusted gross income (MAGI) is the total of your adjusted gross income and tax-exempt interest income you may have. These are the amounts on lines 37 and 8b of IRS from 1040. Some examples of income are: wages, salaries, tips, taxable interest, certain dividends, business income, capital gains, and unemployment compensation, as well as annuities, Social Security payments and some pensions. (source: http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/1601/~/calculation-of-modified-adjusted-gross-income-(magi))
Q. How are commissions calculated?
A. It varies by company. Some are offering a per member per month (PMPM) amount. We’ve seen amounts between $12-$22 PMPM. Other companies are offering a percentage of premium. For the ones we’ve seen so far, the commission is being calculated as a percentage of total premium (subsidized & nonsubsidized portion). Those commission percentages have ranged from 2%-8% first year.
Q. Will consumers be able to purchase health insurance year round?
A. No. The ACA limits both off and on the exchange, product enrollment to the initial open-enrollment period beginning October 1, 2013 through March 31, 2014—unless your client has a “qualifying event” (e.g., divorce, marriage, loss of coverage, birth, adoption, death, employment status change). The annual enrollment period for benefit years starting on or after January 1st, 2015 begins October 15th through December 7th of 2014. (Some exceptions may apply)
Q. Will agents be allowed to sell on the “Marketplace”?
A. Yes, agents can participate in the public and private exchanges, however, you must complete the CMS facilitated certification. We have set up a website devoted to Marketplace Certification to answer questions regarding certification more in depth. (LINK)
Q. Can consumers still purchase HSAs?
A. Yes, nothing in the legislation would infringe upon the ability of an individual to contribute to a Health Savings Account (HSA), or discourage an individual from doing so. The minimum level of coverage required to meet the individual mandate was specifically designed to allow for the purchase of a qualified high deductible health plan that would complement the HSA. (source: http://www.naic.org/index_health_reform_faq.htm)
Q. Is it a lifelong penalty or on an annual basis?
A. Every year the penalty is taken from the consumer that is not insured for at least three months of that year. The penalty is assessed at the time of tax filings and deducted from your return. The penalty is $95 or 1% of your income, whichever is greater.
Q. How do you receive a subsidy?
A. The tax credit subsidy is paid to the carrier by the government on behalf of the insured on a monthly basis. Some consumers may receive “too much” of a subsidy, and will be required to pay back that money upon filing taxes. While some subsidies may have been unfunded and will receive a credit. It is very important that agent’s ensure that consumers are being as honest as possible on their income levels to avoid future penalties.
Q. How do you determine subsidy eligibility?
A. Based on MAGI, demographic information (location, household size). (See a subsidy calculator example)
Q. Can we still offer group coverage?
A. Yes, group coverage is still available through the SHOP. However, we are seeing more employers opting out of providing coverage for their employees and they are migrating towards individual health plans for 2014.
Q. Are there any restrictions on marketing?
A. At this point, there are not as many restrictions as there are in the Medicare Advantage space. Normal State DOI insurance marketing rules would apply. Promote yourself as a Health Care Reform specialist in your area. Don’t forget to use Social media (Facebook, Twitter, Linkedin).