Column 63 How does inheritance effect subsidy?

How does inheritance effect subsidy?

 

A reader wrote this week to ask: With my income level I receive a $605.00 subsidy, here is my question I inherited about $98,000.00 in this month how will this affect my Cover Ca.  I will be 65, March 2015, thinking I will drop my coverage if I have to cover full cost which would be $721.79.  I have Anthem Blue Cross.

Read your insurance insights every Sunday  Thanks Karen

 

It is my understanding that it depends on whether it is income taxable to you.  For example if the money came from the decedent's IRA, it may be taxable to you.  Readers may find an explanation  of MAGI (Modified Adjusted Gross Income at: http://laborcenter.berkeley.edu/pdf/2013/MAGI_summary13.pdf.

 

Since you are already insured through Covered CA, I would suggest that you contact them and verify how this particular inheritance will be handled.  But first verify if the money you are inheriting is income taxable to you.  Not all inheritances are taxable.   Further, while an inheritance of $98,000 may seem like a lot, it's probably not enough to self-insure for medical expenses. Perhaps you would continue paying the full $721 or consider that a change in income may be a qualifying event that would allow you to change plans.

 

Finally it's important to understand that you will likely not be required to repay the entire subsidy as there is a limit on the amount of repayment, as well as the fact that some one time payments are only counted in the month they are received.

Glitches ?

Covered CA, our state Health Exchange continues to upgrade their site as we approach the open enrollment season in the fall, but don't be misled.  Some of the functionality is not explained and is actually counter-intuitive.  This week my client and I faced one of these "glitches".  She had recently lost insurance so experienced a qualifying event.  She had income from a previous employer that ended June 30 and now was self-employed. 

 

We input the monthly income with a start date of January and end date of June.  We estimated her net monthly income from self-employment.  At the summary page it showed the accurate projected annual income of about $30,000. 

 

But when the application was finalized the system had thrown her in to Medi-Cal based on the net self-employment income.  A call to Covered CA was frustrating to say the least.  The representative reviewed the application and determined that we had input correctly so it must be a "glitch". She wanted to put in a ticket to fix the problem.

 

I explained to her that every ticket we have opened with Covered CA has taken no less than 3 months to resolve and some even longer.  Recent examples include: an attempt to correct a birthdate that I input incorrectly. That should be a simple fix, right?  Wrong! Since we have started this both Anthem and Covered CA have passed us back and forth endlessly.  My assistant has spent countless hours on the project and it is still not resolved.  The client is having trouble when she receives services because of the conflict. 

 

So, no we did not open a ticket!

 

The only fix I suspected would work was the same one I have used since fall of 2013.   We withdrew that application and resubmitted the application, using her full middle name, to create a new data set.  We then totaled her 6 months of income, divided it by 12 months, input a beginning date and no end date.

 

The best part of the transaction was that the representative told me she could not forward a ticket up the chain to be reviewed because the application was withdrawn.  I suggested that a memo be sent up the IT chain in hopes of resolving this before open enrollment.  No, that was not an option.

 

Does anyone want to start a pool to see if this is fixed before the next open enrollment?  California Association of Health Underwriters (CAHU) is my last hope to get someone's attention.

Note: All information in this column is provided" to the best of my knowledge" subject to final regulation by the respective agencies.