Healthcare sign up issues and penalties: Wisconsin’s lack of Medicaid expansion

Changing a job or losing a job usually means a change in health care coverage. The big change in 2014 was the folks now have an option to find health care coverage on their own through the Affordable Care Act/healthcare.gov website.

Now, in 2015, we get to find out how the subsidies and exemption provisions of the Affordable Care Act are working out. When filing taxes this year, all of us will need to document our health care coverage and indicate whether any state or federal subsidies received for health care coverage were appropriate based on the actual 2014 income reported on these tax forms.

One of the issues that will cause problems for folks on these returns or when signing up for individual health care coverage is whether their income was so low as to qualify them for a Medicaid plan if Wisconsin had actually opted for the Medicaid expansion.

Because Wisconsin did not expand Medicaid coverage, the healthcare.gov website may have prevented folks here is Wisconsin from signing up for coverage because they presumably should have signed up for Medicaid coverage had Wisconsin expanded that coverage. But, since Wisconsin did not expand Medicaid coverage, there was no actual Medicaid coverage available for folks caught in this Medicaid gap. The solution, announced by the IRS (look for the sections about Medicaid) is that there will be no penalties for lack of health care coverage. The Medicaid exemption can be had from both the healthcare.gov website or when filing a tax return with the IRS.

Marketplace Exemptions
If you are granted a coverage exemption from the Marketplace, they will send you a notice with your unique Exemption Certificate Number or ECN. Keep this notice with other important tax information.

You will enter your ECN in Part I, Marketplace-Granted Coverage Exemptions for Individuals, of Form 8965 in column C.

If the Marketplace hasn’t processed your exemption application before you file your tax return, complete Part I of Form 8965 and enter “pending” in Column C for each person listed.  If you claim the exemption on your return, you do not need an ECN from the Marketplace.

IRS Exemptions
For a coverage exemption that you qualify to claim on your tax return, all you need to do is file Form 8965 with your tax return – you do not need to call the IRS or obtain the exemption in advance.

You will use Part II, Coverage Exemptions for Your Household Claimed on Your Return, of Form 8965 to claim a coverage exemption if your income is below your filing threshold and you choose to file to file a tax return. If you are not required to file a tax return and don’t want to file a return, you do not need to file a return solely to claim this exemption.

Other coverage exemptions may be claimed on your tax return using Part III, Coverage Exemptions for Individuals Claimed on Your Return, of Form 8965. Use a separate line for each individual and exemption type claimed on the return.

This chart shows the types of exemptions available and whether they must be granted by the Marketplace, claimed on an income tax return filed with the IRS, or either may be granted by the Marketplace or claimed on a tax return. For additional information about how to get exemptions that may be granted by the Marketplace, visit HealthCare.gov/exemptions.

Hat tip to Jason Huberty for spotting this info.

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Gov. Walker’s proposed drug testing plan: Meh

On January 22nd, Governor Walker announced his workforce readiness plan, which includes a proposal to drug test folks who receive food stamps or unemployment benefits.

Food stamps is operationally and legally distinct from unemployment, and so the purpose and mechanism for drug testing in each will have to be very different. Recent commentary on this drug testing issue is available from CogDis and the Wisconsin State Journal. And, here is what Governor Walker stated about this proposed drug testing:

Helping People Move from Government Dependence to Independence:

Some employers in high-demand fields, including manufacturing, require their employees be drug-free for safety and other reasons. To assist those looking to secure these positions, the budget includes a plan to require drug testing of those who are applying for or receiving benefits from programs, which may include unemployment insurance, FoodShare, Transform Milwaukee, transitional jobs, and others.

Those who fail the drug test will be offered the opportunity to participate in a drug treatment program, free of charge, as well as job training.

Huh?  This quotation is all that Governor Walker has actually said about this drug testing proposal. Based on this language, it is hard to know anything about this proposal other than that drug testing may be a possibility. Will drug testing be limited to former employees of an employer who does drug testing? Or, will the drug testing apply to any and all?  How will the drug testing be paid for and how will the tests be handled?  Without the actual mechanics and substance for this proposal (perhaps when the specific budget bill is revealed in early February), about all that can be said about who is actually affected . . .  meh.

On-line claims filing

The Department of Workforce Development is pushing for on-line claims filing and has improved the on-line experience to some extent.

FOR IMMEDIATE RELEASE
Monday, December 22, 2014
CONTACT: DWD Communications, 608-266-2722
On the Web: http://dwd.wisconsin.gov/dwd/news.htm
On Facebook: http://www.facebook.com/WIWorkforce
On Twitter: @WIWorkforce

DWD Reminds UI Claimants to File Using Improved Online System

Seasonal filing increases in cold-weather states beginning late fall through winter, including holiday weeks

MADISON – The Department of Workforce Development (DWD) is reminding Unemployment Insurance (UI) claimants about the advantages of filing initial and weekly claims through the agency’s improved online system.

Claimants who file online can avoid wait times associated with filing by telephone during the seasonal increase in filing activity that Wisconsin and other cold-weather states experience during the late fall and first half of winter, including holiday weeks.

DWD encourages claimants who file initial claims online to take advantage of several improvements that were rolled out this fall:

  • Added features to allow most initial claims to be completed online without the assistance of a claims specialist. Claimants also can save their work and finish their claim at a later time.
  • A new employer search that makes it easier for claimants to add employer information to their claim.
  • Enhanced search capability for claimants to select specific occupations.
  • Online fact-finding capability to resolve certain eligibility questions online quickly, reducing the need to mail paper questionnaires to a claimant to complete by hand and mail back.
  • User-friendly assistance for new claimants who are unfamiliar with the online system.

Those who file weekly claims online also have access to additional features, such as:

  • Viewable, printer-friendly UI payment history with the ability to select a specific time period for review and print.
  • Additional details of UI benefits paid, monetary issues, eligibility determinations and appeal information.
  • An enhanced online UI benefits calculator with expanded functionality to provide more precise calculations for partial and full-time wages.

While DWD’s telephone-based automated filing system will continue to operate for claimants who prefer to file initial and weekly claims by phone, DWD advises claimants that phone-based wait times are generally longer during peak volume hours, particularly during weeks with holidays. Claimants can avoid potential long waits on hold by filing online at: http://dwd.wi.gov/uiben/online/

The improved on-line claims filing is a big part of the Department’s response to the unemployment audit report and is certainly needed and welcome. But, these improvements are only a start. There is still little to any effort to provide guidance, assistance, and encouragement to claimants (and employers) to use the on-line system. Tutorials are where? And, where are the postings on the Department’s twitter and facebook sites about how to use the on-line system and its new features? Indeed, unemployment filing information is largely absent from twitter and facebook. The December 22nd press release quoted above is not even on the Department’s facebook page and the only recent info about on-line filing there is this tidbit.

FaceBook-NewOnline.2014.11.04

As noted in an earlier post about the audit report, New Mexico has a youtube channel. You would not know it from its own information, but the Department also has its own youtube channel. The movie/powerpoint explaining the new on-line claims filing system is there (note that there is not much detail about the information on the new on-line system and offers only broad descriptions rather than any specific examples about how the new system works; cf. DWD’s video with this Oregon video about how telephone hearings work).

The second big problem is that on-line access is far from universal. When unemployment systems began moving in the 1990s from in-person claims filing to telephone filing, phones were a utility service present in almost every home. Broadband Internet access is not even available in numerous parts of Wisconsin, on the other hand. And, even where broadband access is available, an individual needs to invest in a computer and the know-how to keep that computer up and running effectively. The  Department’s proposed solution to this problem has been that individuals can go to their public libraries for computer assistance. I have yet to hear of any departmental program about working with librarians in order to assist claimants with their on-line filing, however. So, this push for on-line filing rings hollow until the Department actually puts some muscle behind this effort.

More on the UI audit

One of the recommendations from the audit report is that the annual reports to the Advisory Council about recouped over-payments identify the year at issue for the over-payment (see p.35).

In his letter attached to the report, Secretary Newson notes:

  • The overpayment recoupment rate on which the LAB focuses its recommendation is consistent with the federal overpayment recovery measures and is defined as the amount of improper overpayments recovered divided by the amount of improper overpayments identified within the same year, expressed as a percentage. The U.S. Department of Labor (USDOL) includes this measure in its annual Improper Payment Recapture Activities report.
  • Providing a more specific breakdown per LAB’s recommendation will give broader context for this measure in Wisconsin. We would offer that this breakdown be provided along with the current overpayment recoupment rate so that we remain consistent with the federally defined measure as included in the USDOL’s report.

Newson is right to make these observations. The most recent federal UNEMPLOYMENT INSURANCE PROGRAM LETTER No. 09-13 to address these issues states (see p.9):

One state felt that this measure, as proposed, did not take into account differences in state law that could make reaching the targets easier for some states. Also, the commenter stated, TOP [Treasury/income tax offsets] recoveries may not meet expectations, which are based on preliminary estimates; UI overpayments would have to “stand in line” with other claimant obligations such as child support and student loan debt. According to this commenter, targets may also be unrealistic due to changing economic conditions. Because an overpayment may be recovered some time after it is initially established, and economic conditions may differ at those two stages, as the economy improves and benefit levels fall, there will be fewer benefits against which to offset overpayments and, consequently, states will have a harder time meeting these targets.

Another state did not agree with the methodology, arguing that matching overpayment amounts with overpayments established all from the same CY was not a valid indicator of recovery rate because recovery of overpayments, when it occurs, is often years after the original overpayments are established. This commenter recommended, instead, comparing data for the most recent five-year period.

Department staffers some time ago told me that these concerns were their own. In other words, any kind of annual tracking of over-payment recovery efforts is problematic at best and of limited usefulness in practical terms. Hence, the annual percentage specified in this program letter provides the best overall rate of effectiveness.

And, speaking of effectiveness, Wisconsin was number one in this program letter for over-payment recovery, with a 91.34% recovery rate — almost double the national average (see p.B-2). So, any complaints about Wisconsin needing to improve on this front are dubious to say the least.