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Life insurance is a simple answer to a very difficult question:
How will my family manage financially when I die? It’s a subject no one really wants to think about. But if someone depends on you financially, it’s one you cannot avoid. There are many types of life insurance, but for all of them the bottom line is the same: They pay cash to your family after you die, allowing loved ones to remain financially secure. Life insurance payments can be used to cover daily living expenses, mortgage payments, outstanding loans, college tuition and other essential expenses. And, importantly, the death-benefit proceeds of a life insurance policy are almost never subject to federal income taxes. If you’ve worked hard to establish a solid financial framework for your family—investments, home equity, a savings plan, retirement accounts—life insurance is the foundation upon which it all rests. It can guard against the need for your loved ones to make drastic changes to future plans when you die. Certain types of life insurance even have a built-in cash-accumulation feature that can help you reach savings goals. Most Americans need life insurance, and many who already have it may need to update their coverage.

California Legislature Passes Budget Plan; Reaction Mixed
June 16, 2015
State officials and health care groups had mixed reactions to a budget plan (AB 93) passed by the California Legislature on Monday, Capital Public Radio’s “KXJZ News” reports (Orr, “KXJZ News,” Capital Public Radio, 6/15). For more on the Legislature’s budget plan, see today’s “Capitol Desk” post.
Background
Last month, Gov. Jerry Brown (D) released the revised version of his fiscal year 2015-2016 budget plan, which includes several health care proposals.
Among other things, Brown’s revised budget plan would allot:
$91.8 billion for Medi-Cal, the state’s Medicaid program; $326.7 million for pay increases over two years for the In-Home Supportive Services program; and $228 million to help pay for costly specialty prescription drugs (California Healthline, 6/10).
Details of Lawmakers’ Budget Plan
The state Legislature passed their budget plan on Monday, just hours ahead of the deadline to do so.
The $117.5 billion general fund plan assumes that the state will get about $2.3 billion more in revenue than estimated in Brown’s revised plan (Siders/White, “Capitol Alert,” Sacramento Bee, 6/15). It includes:
Funding for full-scope Medi-Cal coverage for undocumented children and possibly some undocumented adults; Increased reimbursement rates for Medi-Cal providers, including dentists; Restoration of adult dental services in Medi-Cal; Restoration of acupuncture, audiology, podiatry and speech therapy Medi-Cal benefits;Restoration of school-based dental services; and Overtime pay for In-Home Supportive Services providers and home health workers (Gorn,California Healthline, 6/16).
The state Legislature also passed four budget trailer bills, including one (AB 119) related to nursing facilities that participate in the Medi-Cal program (Assembly release, 6/15).
Lawmakers’ Comments
Following the vote, Assembly Speaker Toni Atkins (D-San Diego) said, “We stand by the budget we’ve just approved,” adding, “We know [Brown’s] got some reactions to some of that, but we’re doing it in discussion together. Would we like what we just passed? Absolutely, 100%. But we’re realistic about it.” However, Senate President Pro Tempore Kevin de León (D-Los Angeles) said it is “[u]nlikely” that the plan passed by state lawmakers will be the final budget.
State Sen. Mark Leno (D-San Francisco) said while Brown may take issues with certain parts of the budget, the administration and state lawmakers “are in agreement about 99.2% of the overall discussion here” (“Capitol Alert,” Sacramento Bee, 6/15).
Meanwhile, Republicans criticized the state Legislature’s budget plan, calling it unsustainable.
State Sen. John Moorlach (R-Costa Mesa) said the budget plan passed by state lawmakers would “lead to a fiscal implosion” (Megerian, “PolitiCal,” Los Angeles Times, 6/15).
Jim Nielsen (R-Gerber), vice chair of the state Senate Committee on Budget and Fiscal Review, said, “We do not have money in the bank to support the budget … that we will be passing here today.”
Melissa Melendez, vice chair of the Assembly Committee on Budget, called the spending plan “a political exercise,” noting that state lawmakers would have given up their pay if they had not passed a budget by Monday night. “This is about passing a budget on time. It’s not a budget bill — it’s the Legislative Paycheck Protection Act,” Melendez said (Adler, “KXJZ News,” Capital Public Radio, 6/15).
Brown Administration’s Reaction
The Brown administration maintains that the governor’s revised budget plan already provides funding to raise Medi-Cal rates.
H.D. Palmer, a spokesperson for the state Department of Finance, said, “The administration has already put more than $150 million into its version [of the] budget to roll back rate reductions that were authorized several years ago by the Legislature,” adding that lawmakers’ spending plan would cost $90 million more annually (Orr, “KXJZ News,” Capital Public Radio, 6/15).
However, Palmer said the administration is “optimistic” that ongoing negotiations “will lead to a fiscally sound budget agreement on revenues and spending that the governor can support.”
The final budget will go into effect on July 1 (Young, Sacramento Business Journal, 6/15).
Reaction From Industry Groups
Health care organizations applauded the state Legislature’s attempt to increase Medi-Cal reimbursements.
Luther Cobb, president of the California Medical Association, called the spending plan an “important first step toward fully funding Medi-Cal.”
Meanwhile, California Hospital Association President and CEO Duane Dauner said the plan would “help ensure that [hospital-based nursing] facilities remain open for the current year and are able to continue to provide care to their communities.”
CMA and CHA are part of a coalition of health care groups, called We Care for California, that has pushed for higher Medi-Cal reimbursement rates (We Care for California release, 6/15).
Meanwhile, Jay Lee, president of the California Academy of Family Physicians, expressed concerns about whether Brown’s budget plan would increase Medi-Cal rates enough to draw more providers to the program. Lee said, “For those who are continuing to see Medi-Cal patients the question is, ‘Is there enough there to keep them continuing to see patients as more and more patients have been added to the rolls?’” (Orr, “KXJZ News,” Capital Public Radio, 6/15).

Do you know which government agencies have jurisdiction over ERISA plans?

ebn

Updated Monday, June 1, 2015 as of 2:47 PM ET

Serving as a cautionary tale for employers and their benefit advisers, the Department of Labor’s increased efforts to investigate criminal activity with regards to employee benefit plans continued in fiscal 2014, including the indictment of 106 individuals. The DOL’s Employee Benefits Security Administration closed 365 criminal investigations in fiscal 2014, representing a nearly 30% increase since fiscal 2010. EBSA’s criminal investigations, including its participation in criminal investigations with other law enforcement agencies, led to the indictment of 106 individuals —
including plan officials, corporate officers and service providers — for offenses related to employee benefit plans, according to a recently released DOL fact sheet. In November 2010, Phyllis Borzi, assistant secretary for EBSA, announced increased enforcement efforts, including the Contributory Plans Criminal Project — the agency’s first criminal national enforcement project targeting persons who commit fraud and abuse against participants and beneficiaries of contributory employee benefit plans, including 401(k)s and contributory health plans. “Workers are often the first line of defense in identifying problems with their benefit programs early,” Borzi said at the time. “Therefore, we want to equip them with information to help the department protect and preserve their right to plan benefits.”

See related: Is your client ready for a DOL audit of its health plan?
EBSA is responsible for investigating potential violations of the criminal provisions of ERISA and those provisions of Title 18 of the United States Code that relate to employee benefit plans. The number of criminal investigations has been trending upward since fiscal 2001, increasing 155% since then, but has accelerated in recent years, according a legal alert from the law firm Sutherland Asbill & Brennan. The number of persons indicted has also increased over this period of increased criminal investigations, but, the law firm says, only 23% of those investigations closed in fiscal 2014 resulted in guilty pleas and/or convictions, which is consistent with experience in the preceding three years, but below the 14-year average of nearly 34% and the high water mark of nearly 57% reached in fiscal 2007. In fiscal 2014, EBSA recovered $599.7 million for direct payment to plans, participants and beneficiaries, including $356.2 million in benefits recovered on behalf of workers and their families through informal resolution of individual complaints, according to the fact sheet. Many of the inquiries were received via EBSA’s toll-free number, 1 (866) 444-EBSA (3272), and website, askebsa.dol.gov.

By Mike Reilly on April 6th, 2015Posted in ERISA
When it comes to recovery of overpayments from ERISA beneficiaries…
money is a fungible commodity in the Eleventh Circuit, but is not a fungible commodity in the Ninth Circuit.
This week the U.S. Supreme Court agreed to address recovery of overpayments to ERISA beneficiaries.
1. The Problem: Many times an ERISA plan may overpay a beneficiary. Under ERISA, beneficiaries are promised prompt payment of benefits if they are injured or disabled on the job, but they also agree to repay whatever they get later from the Social Security Administration or from a settlement in a lawsuit.
2. The Issue: Currently, getting that overpayment back from the beneficiary can be lots more challenging if the overpayment occurs in the Ninth Circuit…
In the Ninth Circuit money, apparently, is not a fungible unit of exchange. ERISA plans cannot recover funds from the beneficiary unless specific funds from a settlement or the Social Security Administration can be tracked. If the beneficiary spends that money before the plan can get a court order forcing repayment, the insurer is out of luck. Bilyeu v. Morgan Stanley Long Term Disability Plan, 683 F. 3d 1083 (2012)(Plaintiff received $30,000 in overpayments. Court refused to order repayment because the funds could not be tracked.) The Eighth Circuit follows this line of reasoning, too.
But money in the Eleventh Circuit is a fungible unit of exchange, making recovery of ERISA plan overpayments lots easier. Last November 2014 the Eleventh Circuit determined that when a plan unambiguously gives itself a first-priority claim to third party payments, then an equitable lien attaches immediately upon the receipt of specifically identifiable funds. This makes it irrelevant that the funds were subsequently spent or dissipated. Board of Trustees of the National Elevator Industry Health Benefit Plan v. Montanile, 593 F. App’x 903 (11th Cir. 2014)(The Plan spent $124,000 in medical expenses. When Montanile obtained $500,000 from a lawsuit… he spent it quickly. The Court rejected Montanile’s argument that no repayment was required because the funds had dissipated). Most circuits follow this analysis.
3. The US. Supreme Court Accepts Review. By accepting review of Montanile this week, the Supreme Court may endeavor to resolve this interesting split, which has complicated recovery of overpayments.

by Andrea Davis

Employee Benefit News

Too many employee benefit plan audits are deficient, finds a new report from the U.S. Department of Labor, putting up to $653 billion and 22.5 million plan participants and beneficiaries at risk.
More than 7,300 licensed CPAs nationwide audit more than 81,000 employee benefit plans. The Employee Benefit Security Administration’s review found that while 61% of audits fully complied with professional auditing standards or had only minor deficiencies under professional standards, the remaining 39% of the audits contained major deficiencies.
“I can’t say I’m surprised,” says Danielle Capilla, chief compliance officer with United Benefit Advisors. “DOL audits deal with a complicated area of law where there’s a lot of nuance. So it’s very easy for someone to make a mistake that is then compounded over the years.”
Moreover, she says, the Affordable Care Act “further complicated the waters as it relates to the law surrounding benefit plans. It gives plans more areas to make mistakes. It’s kind of low-hanging fruit [for the DOL] to a certain extent.”
Also see: CMS audits of qualified health plans to focus on broker standards
Documentation errors are one of the most common issues face during a DOL audit, says Capilla. “So much documentation is required – some might be one page, some might be binders – and when you have to keep track of that much documentation every year, it’s really easy to misplace one or not have it stored in the right place.
Another common trip-up for employers is the wrap document that accompanies the insurance carrier’s certificate and contains all the ERISA language. “Not having one, or having one that’s poorly crafted and is missing information,” is also an issue Capilla says she sees.
It’s not a matter of if, but when, employers will get notice of a DOL health plan audit, maintains a recent white paper from UBA. In fact, a “DOL audit is so significant that once a company is embroiled in the audit process, that should be their top priority,” says the paper, Don’t Roll the Dice on Department of Labor Audits.
Also see: DOL enforces ACA through plan audits
And while every audit will be different, the process will go much more smoothly if plan sponsors are prepared ahead of time, says Capilla.
“Remain calm and notify everyone who needs to be notified in your company, as well as your attorney, broker and insurance carrier,” she advises. “And make sure the people who are responding to the audit have ample time and ability – that their calendars are cleared – and that they have the bandwidth to jump through all of the hoops necessary. The quicker you can get through it, the better for everyone.”
Capilla also recommends doing an internal audit, which may reveal areas for improvement, and creating an audit action plan. Doing so “will put you in the best seat should the live letter arrive in your inbox.”

Also see: Fear the DOL health plan audit
In addition to increased outreach to CPAs and enforcement of audit standards by EBSA, the DOL report proposes legislative fixes. It recommends that Congress amend the Employee Retirement Income Security Act definition of “qualified public accountant” to include additional requirements and qualifications necessary to ensure the quality of plan audits. Under the proposal, the Secretary of Labor would be authorized to issue regulations concerning the qualification requirements. The American Institute of CPAs said in a statement that its “overarching goal has been – and continues to be – helping individuals and firms perform the highest quality employee benefit plan audits possible. We will work with auditors, plan sponsors, state CPA licensing boards and the Department of Labor to accomplish that.” The DOL report also urges Congress to repeal the ERISA limited-scope audit exemption and give the secretary the authority to define when a limited scope audit would be an acceptable substitute for a full audit. When auditors have to issue a formal and unqualified opinion, they have a powerful incentive to rigorously adhere to professional standards ensuring that their opinion can withstand scrutiny. The limited scope audit exemption undermines this incentive by limiting auditors’ obligations to stand behind the plans’ financial statements.

Also see: 10 mistakes that may trigger an audit of your 401(k) plan
Finally, the report suggests ERISA be amended to give the Secretary of Labor authority to establish accounting principles and audit standards to protect the integrity of employee benefit plans and the benefit security of participants and beneficiaries.
“The existing patchwork of regulations and rules needs to be overhauled and a meaningful enforcement mechanism needs to be created,” says Phyllis C. Borzi, assistant Secretary of Labor for employee benefits security. “The department is proposing, among other measures, legislation that will fix these problems.”

Employee Benefit News

Senate Republicans back health insurance subsidies — for a price
More than half of Senate Republicans are co-sponsoring legislation that would temporarily extend premium subsidies to those obtaining health insurance in the federal exchange if the Supreme Court strikes down the subsidies under the health care reform law, while the measure also would end the employer and individual mandates. The legislation, S. 1016, introduced last week by Sen. Ron Johnson, R-Wis., and co-sponsored by 31 GOP senators, relates to a key case awaiting a ruling by the Supreme Court: whether the health care reform law limits subsidies for lower income individuals to those obtaining coverage in exchanges established by the states. Rules issued by the IRS in 2012 extend those subsidies to eligible individuals seeking coverage in state and federal health insurance exchanges. Lower courts have split on whether the health reform law authorizes the subsidies only to those obtaining coverage in the state exchanges. If the high court overturns the IRS rules, limiting the subsidies to state exchanges, Sen. Johnson’s bill would continue until August 2017 the subsidies for those now receiving coverage in the federal exchange. More than 8.8 million U.S. residents have enrolled in plans offered in the federal exchange, with 87% eligible for a federal premium subsidy, according to the Department of Health and Human Services. In exchange for a temporary continuation of those subsidies, the legislation would end both the law’s individual and employer mandates, in which individuals who do not enroll in a plan and employers — except smaller firms — that do not offer coverage are hit with financial penalties. “This bill is a transitional response that rescues Americans from the coercive nature of Obamacare, which is an unnecessarily complicated scheme that should not be resuscitated,” Rep. Johnson said in a statement. It is unlikely lawmakers will take up the measure until after the Supreme Court rules on the state vs. federal exchange issue.
Source: Business Insurance Magazine, April 2015

CDHP coverage increases participant cost awareness
May 08, 2015 | By Dan Cook
Most Americans still focus solely on the most basic costs of their health insurance — monthly premium and co-pays. But those who participate in a plan that requires them to engage in the management of plan costs are much savvier about the true cost of health coverage.
A study by Alegeus, based upon input from 5,000 adults, reports a disturbing lack of interest on the part of most plan participants in the details of coverage.
“Only 50 percent of consumers profess to want to play an active role in their health care,” Alegeus says. “Less than half regularly do things like researching treatment options, quality ratings and success rates, seeking second opinions, consulting with peers, or comparing costs. A third never do any of those things.”
But when information was gathered from those in a consumer-driven plan, engagement and cost knowledge increased sharply.
How to sell a CDHP to employees
Employers are struggling to explain the benefits of consumer-directed health plans to employees.
“Consumer directed health care participants — those enrolled in high deductible health plans and account-based programs (such as HSAs, FSAs and HRAs) — scored universally higher than those enrolled in traditional health care plans in virtually all aspects of engagement — including being nearly 50 reported more likely to research and compare costs for health care purchases. They are also a third more likely to engage with their benefit service providers, considerably more fluent with health care coverage and medical billing, and twice as likely to participate in organized wellness activities,” Alegeus reported.
Part of the problem may lie in the degree of interaction plan participants have with plan administrators, Alegeus said.
“When asked about their interactions with health insurance carriers, benefit administrators and health care providers, less than a third of consumers have interacted in meaningful ways — such as visiting online portals, calling customer service lines, subscribing to updates, downloading mobile applications — and 43 percent have done none of these things.”
The survey revealed that nearly half of respondents said they didn’t know what their plan coverage, nor did they have any idea what their health care costs for the year would be. But two-thirds said they feared they may not be paying the right amount for service when they pay a bill, and more than half said they only learn the cost of a service when they pay for it. Only 32 percent said they compare prices on medical services.
“The health care industry is shifting towards individual responsibility for health care costs. Consumers will require substantial support to manage their ever-growing financial responsibilities — as they learn how to become savvy healthcare consumers,” said Steve Auerbach, Alegeus CEO. “These survey results highlight the fact that the industry still has a long way to go, but offers hope that account-based consumer directed health care programs — coupled with smart consumer engagement strategies – have great potential to positively influence consumer behavior, increase accountability, and drive more responsible health care consumption.”

White House Moves to Fix 2 Key Consumer Complaints About Health Care Law
May 12, 2015
Source: The New York Times
The White House is moving to address two of the most common consumer complaints about the sale of health insurance under the Affordable Care Act: that doctor directories are inaccurate, and that patients are hit with unexpected bills for costs not covered by insurance.
Federal health officials said this week that they would require insurers to update and correct “provider directories” at least once a month, with financial penalties for insurers that failed to do so. In addition, they hope to provide an “out-of-pocket cost calculator” to estimate the total annual cost under a given health insurance plan. The calculator would take account of premiums, subsidies, co-payments, deductibles and other out-of-pocket costs, as well as a person’s age and medical needs.
Since insurers began selling coverage through public marketplaces 19 months ago, many consumers and doctors have complained that the physician directories are full of inaccuracies. “These directories are almost out of date as soon as they are printed,” said Kevin J. Counihan, the chief executive of the federal insurance marketplace.
Medicare and Medicaid officials have found similar problems in the directories of insurance companies that manage care for beneficiaries of those programs. In December, federal investigators said that more than a third of doctors listed as participating in Medicaid plans could not be found at the locations listed.
The Obama administration recently adopted stricter standards stating that each insurer in the federal marketplace “must publish an up-to-date, accurate and complete provider directory, including information on which providers are accepting new patients, the provider’s location, contact information, specialty, medical group and any institutional affiliations.”
In addition, Mr. Counihan said, the administration will require insurers to provide physician information in a format that software developers can use to create tools to help consumers find health plans in which their doctors participate. Consumer advocates like Robert M. Krughoff, the president of the Center for the Study of Services, also known as Consumers’ Checkbook, said such tools could be a boon to consumers.
The new standards significantly strengthen an earlier rule, which required insurers to publish directories online and to make paper copies available on request. In the federal exchange, violations are subject to civil penalties of up to $100 a day for each person adversely affected.
Federal officials said that inaccurate provider directories could be a sign of larger problems. If doctors listed in a directory are not available or are not taking new patients, consumers may not have access to covered services, and the insurers may not meet federal standards for “network adequacy,” the officials said. Consumers must often pay extra when they use doctors outside the network of their health plan, so an inaccurate directory could also lead to higher costs for patients.
Moreover, doctors said that they too need accurate directories so they can refer patients to physicians in the network when specialized treatment is required.
“The impact of inaccurate provider directories on consumers can be devastating, especially on those consumers who need to carefully examine networks for specific subspecialists, cancer centers or children’s hospitals,” the American Medical Association told state insurance officials in a recent letter endorsed by dozens of health care provider and patient groups.
But insurers say that the problems might not be easy to fix, and that doctors are partly to blame for the directory errors. Insurers “are unable to guarantee the accuracy of the provider’s status” in a directory because doctors often “stop accepting particular health plans’ members off and on throughout the year and fail to notify the plan in a timely manner,” America’s Health Insurance Plans, the chief lobby for the industry, said in a letter to the Obama administration.
In its online doctor directory, Blue Cross and Blue Shield of Texas says that it makes every effort to provide correct information, but that it “cannot be responsible for omissions or errors in the provider details.” Aetna says that data in its directory is “subject to change at any time.” UnitedHealth tells Medicare beneficiaries, “A doctor listed in the directory when you enroll in a plan may not be available when your benefits become effective.”
The problems that consumers face with unexpected costs may result, in part, from the way plans are listed on HealthCare.gov, the website for the federal marketplace. More than 8.5 million people are in private health plans selected through the site, and the plans are listed in order of their premiums, from lowest to highest.
This encourages consumers to focus on premiums rather than total costs, said Mr. Krughoff, the Consumers’ Checkbook president, and they often spend hundreds or thousands of dollars more than they need to.
Mr. Krughoff’s group has been publishing a guide to health plans for federal employees for more than 30 years, and a version of its online tool for comparing health plans is available on the website of the federal marketplace in Illinois. “It’s been a great tool,” said Jose M. Muñoz, a spokesman for Get Covered Illinois, the state agency that promotes enrollment.
The tool can perform searches tailored to a person’s needs and priorities. It asks consumers to describe their health status, offering five levels from excellent to poor, and to list “expected medical procedures” like childbirth, knee replacement or prostate removal. It also provides an estimate of total yearly costs for the user.
Federal officials said that they might link HealthCare.gov to an out-of-pocket cost calculator later this year, and that they hoped to make such comparisons a standard part of the shopping experience at the site in later years.
“We know that we have work to do to make it easier for consumers to find plans that meet their needs,” said Lori Lodes, a spokeswoman at the Centers for Medicare and Medicaid Services, which runs the federal marketplace serving more than 30 states.
A few state-run exchanges are developing similar tools. Peter Nichol, the information technology director for the state insurance exchange in Connecticut, said it would add a “cost calculator” to its website this summer.
The Obama administration is also taking steps to increase the accuracy of doctor directories in Medicare. About 30 percent of the 55 million beneficiaries are in private Medicare Advantage plans that typically use networks of doctors to care for patients.
The Medicare agency said it had received complaints about insurance company directories that included doctors who “have retired from practice, have moved locations or are deceased.” New federal rules will require insurers to update their Medicare directories each month, “with specific notations to highlight those providers who are closed or not accepting new patients.”

NECO Foundation is 501c (3) organization that provide orphaned children in Nepal (between the ages of 5 to 12) with food, shelter, clothing, medical, dental care and education in a home-like setting till the age of 18.
NECO Foundation URGENTLY needs to reconstruct the building after the earthquake disaster to continue serving these children.
Currently, children have NO place to stay. All the walls have been damaged; kitchen, office, kid’s bedroom, library hall, all had been extensively damaged.
At this point, children are homeless. They are staying under an open cowshed (Barn), This barn has no heat, electricity, drinking water, or toilets for children to use. There are many problems for their daily life. They are in urgent need of your help and your support.
NECO Foundation needs around $50,000 US dollars to rebuild and repair the current orphanage. Your donation will help these children to start their life. For more information, Please visit http://necofoundation.org

Obamacare Took $729 Bite Out of Tax Refunds – H&R Block
April 28, 2015
Source: CNN Money
The majority of H&R Block clients who received federal help to pay for their health insurance in 2014 got an unwelcome surprise when it came to their refund.
Sixty-one percent of those filers saw their refunds reduced by an average of $729 — or a third of the group’s overall average of $2,195, the consumer tax services provider said Monday.
The reason for the decline: they’d underestimated what their 2014 household income would be when they signed up for insurance on a health exchange back in 2013.
The lower your income, the higher your federal subsidy. Anyone earning up to 400% of the poverty line is eligible for a subsidy. That means any individual earning up to $45,960 (or $94,200 for a family of four).
If you received a subsidy based on an estimated income that turned out to be lower than your actual income, you must repay a portion of the subsidy.
Roughly 13% of the H&R Block-prepared returns involving health insurance subsidies saw no change in their refunds, while about 25% actually saw their refunds increase by an average of $425 because those filers had overestimated their 2014 incomes.
Filers who remained uninsured for more than three months in 2014 were subject to a penalty. The average penalty paid was $178 among its affected clients, H&R Block said.
The penalty for being uninsured in 2014 was $95 or 1% of income, whichever is greater. This year, it will be the greater of $325 or 2% of income. That means an uninsured family of four with a $60,000 income would see their penalty jump to $975 from $400 in 2014.
If you don’t have the money to pay the penalty or if you refuse to pay, the only legal way for the government to collect that money is to withhold as much of your refund as necessary.
There are, however, some exemptions to the penalty that a filer may claim. Among H&R Block clients who claimed a penalty exemption, 46% said their income fell below the tax-filing threshold.
H&R Block did not reveal how many 2014 returns it prepared that had a federal subsidy component. But the company did say it prepared 20.5 million returns overall.
The IRS, which is the final arbiter on tax statistics for the country, has not yet released a statistical analysis of the 2014 returns.