HHS Proposes New Regulations for Health Insurance Premiums Subsidy Eligibility

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Under the new rules, the exchange administrators (federal and/or state) must make certain verifications.
The Department of Health and Human Services (HHS) has now proposed a rule in which the state or federal administrators of the health insurance exchanges will be required to verify whether or not those who are applying for healthcare coverage tax credits through these marketplaces are enrolled or even eligible to qualify for coverage through a plan that is sponsored by an employer.

This would require new measures to be implemented in the exchanges until a centralized database is compiled.
The administrators of those health insurance exchanges will be permitted to use data from any electronic source to which the HHS has given its approval, in addition to paper records, so that the eligibility of an applicant for the subsidies can be confirmed.

The health insurance exchange administrators also have the choice of handing this process over to the HHS.
In that case, it would become the responsibility of the HHS to provide the verifications to allow consumers to use the health insurance marketplaces to apply for the subsidies.

The healthcare reforms have made premiums subsidies available to certain individuals. However, these health insurance subsidies do not apply to individuals who are already enrolled in medical coverage, or who are eligible to take part in a plan that is offered through their employer (provided that it meets the minimum value and affordability standards).

Regulations that have been recently issued by the Internal Revenue Service have helped to clarify how the concept of affordable health insurance should be defined. It has now made it evident that a plan is not considered to be affordable if an employee is paying for single coverage through premiums that exceed 9.5 percent of his or her wages.

Furthermore, subsidies will also not be available for health insurance premiums for employees who are earning more than 400 percent of the poverty level as defined by the federal government.

The newly proposed health insurance subsidy verification rule sates that employers will be notified as to whom among their employees is eligible for coverage through an exchange that has been subsidized, and the process that they can follow if they wish to appeal this decision.

Source: www.liveinsurancenews.com; Colleen Jeremy; January 18, 2013.

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