Column: 72 percent of Obamacare insurance recipients may not get subsidies
Submitted by editor on Mon, 08/11/2014 - 11:17am
Now this is news. The Washington, D.C. Circuit Court’s recent ruling against the IRS may spell the end of Individual Mandates for Health Insurance (and individual penalties for not having qualified health insurance) and the Employer Mandates for companies with over 50 employees (and the corresponding penalties for not complying)…IF a state did NOT set up a State Health Exchange.
A few years ago, Nancy Pelosi said, “We have to hurry up and pass this so we can find out what’s in it.” Well, written very clearly in the Affordable Care Act, aka Obamacare, is the requirement that subsidies are available only through exchanges established by a STATE. This means that only individuals and employers who purchase Health Insurance through a qualified State Health Exchange would be eligible for federal subsidies. This is the heart of making Health Insurance “AFFORDABLE.” If no subsidies available, then you pay the full premium.
What the recent D.C. Circuit Court just said was that the Federal Health Exchanges do NOT qualify. Now hold onto your hat because when the IRS is charged to enforce this, then when the 72 percent of folks who purchased Health Insurance through the FEDERAL Health Exchange file their 2014 Income Tax Returns and claim the credit for subsidies against the purchase of their Health Insurance, the IRS will have to deny the credit. It is expected that the IRS will appeal this to the U.S. Supreme Court. If the IRS loses, then all those subsidy credits will be owed BACK to the U.S. Government for folks (and companies) who claimed them for Health Insurance purchased through the Federal Health Exchange.
Many legal experts are now coming forward to say that if you don’t qualify to get the federal subsidies (because you are in one of 72 percent of the states that don’t have a State Health Exchange), and you can’t afford the mandated Health Insurance without them, then individuals and employers in those states that do NOT have a State Health Exchange are exempt from having to comply with Obamacare’s mandatory insurance requirements.
What does this mean for Nevada? Well, as you know, Nevada is only 1 of 14 states that DID set up a State Health Exchange. This could be a good thing or a bad thing. If you purchased Health Insurance through the Nevada Health Exchange, you will still get the subsidies and will be allowed the credit for them on your Income Tax Return with the IRS. If you did not purchase Health Insurance at all, because Nevada did have a State Health Exchange, then you are still under the mandate as a Nevadan and will probably still having to pay the penalties to the IRS for not having Health Insurance.
Bottom line? Remember all that trouble folks had with the Federal Health Exchange to get signed up and all that hoopla about folks finally getting signed up for Health Insurance through the Federal Health Exchange? Well now all those same folks will probably get a notice from the IRS, sometime in 2015, telling them that they owe for all the subsidy credits they thought they were entitled to in 2014 to help pay their premiums that they now are not eligible for.
Did you hear: “I don’t make jokes. I just watch the government and report the facts.” — Will Rogers
— Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at (775) 882-4459. On the web at BullisAndCo.com and on Facebook.
