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I need help with an ACA issue, please read below

A relative of mine whose enrollment I personally proceeded with the ACA has a big problem with her employer. She couldn't afford her employer health insurance of $478 a month, she obtained a $72/month through the ACA. During the enrollment process the ACA agent emphasized naturally that I cancel the employer’s coverage. Once the ACA coverage became effective on March 1st to cancel the employer coverage I faxed the details to the company as an HR representative instructed. But in April My relative realized that the same coverage amount of $478 was still taken out of her paycheck. She called HR and they asked her to just show up with her new ID card in order to make a copy and everything will be cancelled. She went to the office with her card only to be told after they examined it that they weren’t familiar with any ACA and that they couldn't proceed with the cancellation due to IRS Law that forbade them to cancel any health coverage in the middle of the year except during open enrollment because of the pre-taxed health benefit system.

Can any of you explain it to me?

I called IRS they said they had no such law. IRS isn't even set up to provide me with a letter to allow my relative’s company to proceed with the cancellation. They only provide automated information of the new health law and for any more information I was directed to the I called ACA, an agent claimed that anyone should be able to cancel at anytime, but they wouldn't be able to help me with the company.

Please tell me what I can do? Is it real that cancellation is impossible before open enrollment in December as the company claim? Is the company messing with me and my relative since the company is in a state (FL) which has been sabotaging enrollment effort? What can I do?

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Comment Preferences

  •  I used a licensed insurance agent for my (2+ / 0-)
    Recommended by:
    VClib, FloridaSNMOM

    questions. Even if you have navigators in your area they are temporary, unlike insurance agents.

    Call around until you find a progressive liberal one that can help. They are free, they are paid by insurance companies. Good luck.


    Tracy B Ann - technically that is my signature. If I had Bill Gates money, I'd buy Detroit.

    by ZenTrainer on Wed Apr 09, 2014 at 09:35:15 PM PDT

  •  Way above my pay grade. Rec'd/tip's - hope you (1+ / 0-)
    Recommended by:

    can fine somebody with more expertise.

    if a habitat is flooded, the improvement for target fishes increases by an infinite percentage...because a habitat suitability index that is even a tiny fraction of 1 is still infinitely higher than zero, which is the suitability of dry land to fishes.

    by mrsgoo on Wed Apr 09, 2014 at 09:56:19 PM PDT

  •  Based on the tiny amount I know about (0+ / 0-)

    employer-based insurance plans, this

    they couldn't proceed with the cancellation due to IRS Law that forbade them to cancel any health coverage in the middle of the year except during open enrollment because of the pre-taxed health benefit system.
    seems vaguely plausible, though not precisely stated.  

    In order to qualify for advantageous tax treatment, certain employer-based insurance plans had (pre-ACA, probably post-ACA as well) to follow specific sets of rules about who would be covered and how.  If the employer lets one employee bend those rules, they can lose that tax treatment for the entire insurance program.  So it's not exactly illegal - no one is going to jail - but it could result in the insurance coverage of all of the employees being treated differently for tax purposes.

    (Again, this is based on a miniscule amount of knowledge, and may be completely wrong.)

    I have no idea how this sort of employer-based insurance was supposed to interact with ACA.  My understanding is that the individual plans on the exchanges were not intended for people with employer-based insurance, at least those whose employer-based insurance meets the ACA's affordability guidelines (which are a percentage of income, not a subjective feeling).  

    I don't think I've ever seen anyone answer the question of what happens if you qualify for ACA coverage because her employer-based insurance is unaffordable, but can't escape from the employer-based plan.

    I know that's not very helpful, but it's all I have.  :-(

  •  I thought it was pretty well hashed out here... (4+ / 0-)

    That if an employer offered an ACA compliant plan, then an employee was stuck with that - even if it might be unaffordable. That was one of the big criticisms of the ACA rules by many here.

    I do know that in order to obtain the government's allowance for taxes and other benefits that employers can only allow changes to health care plan enrollments during open enrollment periods or in the case of certain "life events" such as a new baby, loss of job by spouse that caused loss of previous coverage, etc. Whether availability of ACA coverage is considered a life event, I don't really know, but I would doubt it.

    •  Not if it's "unaffordable." (4+ / 0-)

      If the employer charges the employee so much that it would cost more than, I believe, 9.5% of the employee's income, then the worker is not required to sign up for it and can go to the exchange instead, and qualify for subsidies. (I did that.)

      •  Yes, you are absolutely correct about that... (0+ / 0-)

        and it was my bad that I neglected to state that there was a top rate where an affordability escape clause came into play. I think that the discussion here was that for most people - particularly those with lower incomes - affordability was far below almost 10% of income.

        Thanks for making the correction!

  •  Assuming (5+ / 0-)

    she's eligible for the exchange and subsidies based on unaffordability based on premium contribution over 9.5% of household income to cover herself alone:

    Yes, obtaining other coverage under the exchange is a qualifying event, and they are required to allow cancellation.  They should also return premium contributions back to the date of coverage and notification. If they do not comply, call the Department of Labor.

    Iron sharpens Iron. Normal is a dryer setting. STOP illegal immigration NOW! -- Make it LEGAL. If Corporations are People--Let's draft them.

    by benamery21 on Wed Apr 09, 2014 at 10:31:04 PM PDT

  •  Who is the insurance company (1+ / 0-)
    Recommended by:

    for the private plan obtained thru the exchange?  

    Iron sharpens Iron. Normal is a dryer setting. STOP illegal immigration NOW! -- Make it LEGAL. If Corporations are People--Let's draft them.

    by benamery21 on Wed Apr 09, 2014 at 10:59:43 PM PDT

  •  Contact state Wage & Hours division (3+ / 0-)
    Recommended by:
    petesmom, FloridaSNMOM, second gen

    People drop employer insurance coverage mid-year all the time -- easiest example would be someone who gets married, and they go onto their spouse's policy because it's cheaper and better. Or they get divorced and drop the ex-spouse, or the spouse dies. Or the child turns 24 or 26 or graduates from college (or god forbid, dies) so you drop that child off.

    They undoubtedly have a form in the office to do exactly that.

    The "open enrollment" restrictions only restrict when you can ADD coverage, not when you can drop it.

    I would complain to the state Wage & Hours division (the same people who deal with unpaid wages) about the employer continuing to deduct the premiums from paychecks after being instructed not to.

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