Health Coverage Tax Credit (HCTC) via PBGC

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Health Coverage Tax Credit (HCTC) via PBGC

Postby tomindenver » Sat Oct 28, 2017 10:22 am

Has anyone looked into the HCTC tax credit for those retirees still under 65 (am I the last one?) ? My understanding from browsing IRS and TurboTax sites is that if you get your pension thru PBGC and if you either get a non-marketplace individual plan (i.e, not ACA plan) or a plan from your spouse's employer (that doesn't pay over 50% of the premium), you can get 72.5% of your premiums paid for via the HCTC credit. Seems too good to be true. Apparently, a law was passed under the Obama administration that allows this credit to be taken thru 2019. BTW, the reason you apparently can't use an ACA plan with the HCTC is because you can't get both the ACA premium tax credit and the HCTC for the same year. But I wonder if you could still get an ACA plan if you don't qualify for the premium tax credit due to income level.

Also, I tried to find out if Avaya is still going to provide the $2500 subsidy (HRA funding) as they have the last couple of years. I called the Avaya about it. The rep didn't know (of course) and opened a ticket. I haven't heard back. I also asked (via email) one the lawyers in the bankruptcy case if they were going to pay it. Again, haven't heard back. I also called OneExchange. As was mentioned on another post, they said I was eligible for the $2500 for 2018. But I pushed them and said being eligible doesn't mean the funding would be there. I asked them to let me know in writing if the funding would be there. They said they couldn't do that. I asked for a Supervisor. They said one would call back in 24 hours. Didn't happen (sigh).

Anyway, the HCTC tax credit would be wonderful if I can truly qualify for it. Just thought I'd float it to this forum to see if anyone else is familiar or knowledgable on it. Please share if you are. Thanks.

TomInDenver
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Re: Health Coverage Tax Credit (HCTC) via PBGC

Postby lucycarlson105 » Sat Oct 28, 2017 12:47 pm

No Tom, you are not the last one here under 65. I am also and will be looking for health insurance information so anything that you come up with I would appreciate hearing about. Navigating the health market in addition to all this Avaya mess is about driving me nuts right now. Thanks in advance for your posts.
Lucy Carlson
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Re: Health Coverage Tax Credit (HCTC) via PBGC

Postby Vbaumwald » Sat Oct 28, 2017 1:24 pm

Hi Tom and Lucy,
I am under 65 as well. In 2017 I did buy through the Mass Health Connector, which I would have to assume is an ACA plan..yes I am sure..but the info you provided is very interesting and to date I have not heard about it before..hmm I'd love to hear more or find out more..I may call my accountant sometime next week and see what he has to say..I don't even know where I would purchase a plan outside of the connector in Massachusetts..hmmm
Vickie Baumwald
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Re: Health Coverage Tax Credit (HCTC) via PBGC

Postby tomindenver » Sat Oct 28, 2017 5:29 pm

That would be great, Vicki, if you could call your accountant (I don't have one). I am not a pro and I might not be understanding all the nitty gritty rules about it. I'd hate to assume I am going to get a credit and then it doesn't happen (ugh). We'll see if any more responses come, also. In the end, I may end up trying to call the IRS (ugh). Last time I did that I think I gave up waiting for a rep. Anyway, looking forward to what you and others hear. i'll post more too if I learn more. Thanks.

Oh and as far as non-ACA plans, I think if you just call insurance companies directly, they probably can answer. I've been getting Kaiser out here and their site would always show ACA and non-ACA, but they always looked the same, so that was confusing. Not sure if non-ACA plans will be short on coverage compared to ACA.

Tom
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Re: Health Coverage Tax Credit (HCTC) via PBGC

Postby pbodwell » Sun Oct 29, 2017 6:31 am

Tom, If you live in Colorado you must go through Connect 4 Health Colorado. One Exchange will get on the line with you and help you. If you go to OneExchange.com/Avaya and fill in all the questions it will show you if you qualify for a tax credit It's based on your income (pensions, SS, etc). Your first step is calling One Exchange because they manage your HRA and will help you. You can apply for the credit (in Colorado) whether or not you have a market or non-market plan. That's because in Colorado you must go through Connect 4 Colorado to get the tax credit. Last year I started getting the tax credit because the amount Avaya gave us wouldn't pay for hardly anything. By the end of January they put $2,000 more in the HRA which was a little more than the tax credit gave me so I switched to using the HRA (you can't use the HRA and the tax credit at the same time because that is double dipping). I had to lie and say my income was more than it was to get them to drop the tax credit but it worked. Whether you get your pension through PBGC or Avaya should not make a difference. I was an hourly employee so my pension will still come through Avaya so I'm not sure what the salaried health insurance was but I'm assuming if they have told you to go to One Exchange that you have an HRA set up with them. I haven't heard that Avaya will not put the money in the HRA so I'm looking at the glass half full. They said they would so I see no reason that they won't. Last year did salaried employees have an HRA at One Exchange? I have a non-market plan that is discontinued in Colorado next year but I'm hoping it's going to be easy enough to just switch to another plan with the same insurance company. That's hopeful thinking because last year was a nightmare. If that happens I will just call One Exchange and tell them what my new plan is and file for new form for reimbursement.
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Re: Health Coverage Tax Credit (HCTC) via PBGC

Postby Vbaumwald » Sun Oct 29, 2017 7:23 am

In Massachusetts we are also required to go thru the Mass Health Connector...when I first started with One Exchange they knew nothing about it and were not helpful..they actually directed me to go thru the Connector in my state on my own...we have our own state helpline for the Connector and those folks were wonderful. The first year I did not qualify for any credits but the 2nd and third year I did and I did get those directly thru them...I thought the credits Tom was talking about were something different, but maybe I misunderstood that and when I call my accountant next week he would probably tell me I am already getting those..most likely I misunderstood this as something else. But one interesting fact is that no one ever told me I could not take the HRA $ ...this year, 2017, since I had no choice but to find a job after the supplemental went away, I am not sure I will qualify for the credits anyhow..we shall see after Nov 1.
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Re: Health Coverage Tax Credit (HCTC) via PBGC

Postby tomindenver » Sun Oct 29, 2017 8:46 am

pbodwell, Thanks, but I am talking about a different federal government tax credit than the one you are referring to. For discussion purposes, I'll refer to the 2 government tax credits as PTC and HCTC. And both of these are from the government, not from Avaya.

PTC (Premium Tax Credit) is the one you were referring to and is the one where you go through the federal or state health exchange web site (e.g, Connect4Health for me), and find out if you qualify for it. If you qualify, you can get the PTC to help with premiums and the amount you get depends on income. And as you indicated, you can't get the Avaya subsidy ($2500 for salaried retirees) and the PTC for the same year. The last couple of years, I went thru OneExchange and got the $2500 Avaya subsidy via HRA funding because I did not qualify for the PTC, and even if I did it probably would not be as much as the Avaya subsidy.

HCTC (Health Coverage Tax Credit) is a different credit available to help with health insurance premiums for people who get their pension via PBGC if they use a qualified health insurance plan. Here is a website that explains it: https://www.irs.gov/credits-deductions/individuals/hctc (google searches show TurboTax sites that also explain in simpler terms). Since I was salaried and will be getting my pension via PBGC next year, and since I am not sure Avaya will provide HRA funding because they are in bankruptcy, I began looking into this credit, which I noticed was mentioned in a couple Avaya forum posts in the last couple of months. At first, I thought this was a real specialized credit that I wouldn't qualify for, but after reading that site I mentioned and researching some more, it looks like I might be able to qualify for it if I can find a plan outside of the ACA. If my pension wasn't going to be turned over to the PBGC, I definitely would not qualify. But now, even if Avaya does provide the HRA Funding and I can get Avaya's $2500 subsidy, this HCTC credit would be even better since it pays 72.5% of health insurance premiums.

The web site I mentioned says you can't get the HCTC and the PTC in the same year. I presume you would not be able to get the Avaya $2500 subsidy and the HCTC in the same year either, but I don't know how that is enforced. I need to learn more on HCTC, but I think the way it works is you fill out a form when you do your taxes in order to get the credit. Haven't had time to plunge deeply into it yet, which is one reason I posted this.

Anyway, sorry for any confusion. I probably should have explained this better.

Tom
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Re: Health Coverage Tax Credit (HCTC) via PBGC

Postby Vbaumwald » Sun Oct 29, 2017 8:53 am

Hey thanks for the clarification Tom..I had a feeling it was a different credit..nad I too will have a PBGC pension as of December. I am out of town till Tuesday but I promise when I get back I will talk to my accountant about it and let you know..he is very helpful with my questions especially this year..I have been using him for many years and I think he feels bad about what we are all going thru.
Vickie
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Re: Health Coverage Tax Credit (HCTC) via PBGC

Postby dwhisenant » Sun Oct 29, 2017 10:33 am

For those interested in health insurance outside of the ACA, last year I purchased a "short term plan" from United Health Care- I had to use a broker to get access. Since it is outside the ACA it does not cover pre-existing conditions, wellness visits or pregancy. For my wife that was fine. It is accepted by most Doctors, hospitals and clinics. It is called a short term plan because it is not a full year plan, it was for 362 days. It does not automatically renew, you have to reapply each year. You are subject to the ACA penality on your tax return. I did all the math and I still saved $2000, even with paying the tax. I paid about $5000 for the plan with a prepay discount of over $1000. It won't work for everyone, but it might for a few of you. If we qualify for the 72.5% credit I won't use it again, so I am also very interested in whether or not it will apply to us.
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Re: Health Coverage Tax Credit (HCTC) via PBGC

Postby cfrinco » Sun Oct 29, 2017 10:45 am

I am also interested in this. Since our health care options were so bad I took a part time job that provided me benefits. I resigned from that job this week and will be going on Cobra for health care. While it is still better than anything offered through the Exchange I'm hoping that I can use this to help pay for my Cobra benefits. I have read the info on the website and I'm hopeful.
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