Shortly after the announcement that the employer mandate is delayed until 2015, the federal government announced another change to the implementation of the Affordable Care Act (ACA).
This time the change is regarding how an individual’s eligibility for a health insurance subsidy will be verified.
A person is eligible for a subsidy if:
(1) he or she earns less than 400% of federal poverty level (those earning less than 133% may be eligible for Medicaid); and
(2) he or she does not have access to affordable coverage (costing less than 9.5% of income) from his/her employer.
The initial plan was for the exchange to instantaneously verify a person’s eligibility at the time of purchase by running the inputted data against a federal database. However, this new announcement means that consumers will be on the “honor system” when it comes to reporting their income and access to employer-sponsored coverage.
So, should you fib to get a subsidy?
We don’t recommend it, as the truth will come out on your 2014 tax return. And, the penalty for lying is pretty steep: as much as $25,000, plus paying back the subsidy.
Wondering if you will be eligible for a subsidy? Confused about how to purchase insurance on the exchange? Give us a call! We can help.