Health Coverage Tax Credit (HCTC) via PBGC

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Re: Health Coverage Tax Credit (HCTC) via PBGC

Postby Vbaumwald » Mon Nov 13, 2017 10:05 am

Thanks once again Tom for the info. Yes I will call and make a pest of myself, no problem there. I also have the name of a supervisor there but that was from year 1 so maybe she is not there and. I will go to MaryAnn....problem is I am working again, as a caretaker type (because of all this) and don't have as much time as before. Yes they seem to think this is our FT job..they don't make it easy .....a lot of the good yet less costly plans in Mass are not national insurers..like I bet hardly anyone out of Mass has heard of Neighborhood Health Plan but they are so much less then BCBS with just as good coverage and network...ta ta for now folks..be back to you after Wednesday with more word from my accountant hopefully
Vickie in Boston
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Re: Health Coverage Tax Credit (HCTC) via PBGC

Postby dwalker » Wed Nov 15, 2017 3:23 pm

I had a successful meeting with Florida Blue this morning and was able to arrange coverage directly from them for 2018. This is outside the exchange but is the same coverage that I was buying in the exchange. They created a new application for coverage effective 1/1/2018. The representative told me to call healthcare.gov before 12/15/2017 to alert them that I had arranged for private coverage and would need to cancel effective 12/31/2017. That will stop the auto renewal of my exchange plan for 2018. I was surprised that the representative who I met with was familiar with the HCTC. She said that I would need to set up payments with the IRS if I wanted them to pay their 72.5% monthly as an advance tax credit payment, of which I was already aware. Florida Blue is set up to accept those payments so as soon as I get the paperwork from the PBGC, I will contact the IRS. For any of you in Florida, this is an option because Florida Blue has decided to continue to serve all Florida counties for 2018. My meeting was at their Carrollwood office here in Tampa but they have centers throughout the state.
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Re: Health Coverage Tax Credit (HCTC) via PBGC

Postby tomindenver » Thu Nov 16, 2017 11:02 am

Hi Steve,

Regarding your post over in the Pensions section under topic "Court Appearance" on Thu Nov 16, 2017 7:53 am, I am going to try an answer your questions, but I am replying over here because all your questions are around HCTC and this is where most of the HCTC discussion is.

First, please understand that so far we have nobody to consult with at Avaya or OneExchange when it comes to getting answers on HCTC, so most of the info on this has been from retirees like myself who have read thru many of the IRS HCTC web pages. There are a couple of retirees that have talked with their accountants and you will see the info they shared in earlier posts in this discussion thread. If you haven't already done so, I would encourage you to read all the posts in this thread as there is a lot of good info. You will find many answers and references to web sites where you can read about HCTC.

The insurance policy you need to qualify for HCTC can and should be an ACA compliant policy (to avoid a penalty), but it cannot be purchased on a Marketplace Exchange site (like healhcare.gov or your state's site). It has to be purchased directly from the insurance company or thru a broker. The OneExchange site has a page where you can shop non-marketplace plans.

People may be purchasing insurance or "filing" already, but you are are right that they won't be able to qualify for HCTC until their pensions are transferred over to the PBGC (December, 2017 or after). At that time, the PBGC should be sending a letter out to everyone affected, and that letter will be needed as proof when applying for HCTC at tax time or if you register to get advance HCTC premium payments during 2018.

When you file the tax forms for HCTC, you specify the months for which you want to use the HCTC, so even if you retire next year and start getting your pension thru PBGC then, you can still use HCTC for those months that PBGC is paying your pension next year.

I personally have seen no info on IRS HCTC web sites that your spouse can get HCTC unless she also is getting her pension from PBGC. I am pretty sure her survivor benefit with your pension is completely separate from the health insurance.

The question about income requirements, sliding scale, etc for qualifying for HCTC were discussed in earlier posts and so far there is consensus here that there are no income requirements. So it should not matter how much you and your spouse make in 2018.

The biggest issue we are concerned with now is whether tax reform will wipe out the HCTC if it is passed and implemented in 2018.

I think that covered most or all of your questions. Good luck.

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

Postby sgaeth » Fri Mar 09, 2018 5:58 am

Does anyone have any updates on the HCTC? I am looking for a new plan and this will definitely be a deciding factor.
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Re: Health Coverage Tax Credit (HCTC) via PBGC

Postby tomindenver » Fri Mar 09, 2018 9:48 am

sgaeth, From my perspective, the latest is some in Colorado have tried to file an IRS form to get advance premium payments via the HCTC program, but ran into a snag because a "vendor #" from the health insurance provider is required on the form, and the provider, Kaiser, apparently does not participate in the HCTC advance payments piece of the program. This does not mean that HCTC cannot be used. It just means that the premium reimbursements can't be requested in advance and instead would occur when taxes are filed in 2019. But other questions remain including: when will PBGC officially start paying the pensions instead of Avaya? (HCTC requires PBGC pay the pensions before it can reimburse premium payments), and did tax reform eliminate the HCTC program (no evidence has surfaced that I know of that this has happened ... and consequently, I think it is is likely the program was not eliminated ... also HCTC web sites have been updated for 2018 which further supports this).
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Re: Health Coverage Tax Credit (HCTC) via PBGC

Postby dwhisenant » Fri Apr 20, 2018 1:21 pm

I am a 69 year old retiree with a 63 year old spouse. I had hoped my spouse would qualify for the HCTC. I wrote the IRS explaining my situation and asked if she would qualify. The answer was no, she would only qualify if it was within 24 months of me turning 65, and I am over 48 months past that date. So, no HCTC for my spouse - but I did get to use the Avaya HRA. :cry:
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Re: Health Coverage Tax Credit (HCTC) via PBGC

Postby ckatz01 » Sat May 12, 2018 9:36 pm

Now that most of us have probably received our PBGC letters, next step HCTC? PBGC will not administer the payments for the 72.5% we could be entitled to. According to them, this is handled directly by the IRS. I have reviewed all of Vern's info (thank you!) and googled the topic today. Where does one begin? There are a variety of forms- Here's what I think they are: 13441-A to register, 14095 for reimbursements of payments to date, 13973 to make your 27.5% payments each month if you want premiums paid (is there another form for this?), 8885 for end of year taxes.(Am I on track?) As much as I'd like to have 72.5% paid for me each month I'm thinking simply applying for the credit when I file my 2019 return (is that form 8885 or other) may be easiest.
Has anyone started the process? Or should one wait til pbgc is making the pension payments. etc. What is your read on this and understanding of steps/forms to use for the HCTC. Thanks for easy explanations!
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Re: Health Coverage Tax Credit (HCTC) via PBGC

Postby glhbco » Sun May 13, 2018 7:36 am

I tried filling out the IRS 13441-A form to receive my HCTC. Part 4 of the form requires an "HCTC vendor number", supposedly supplied by my health plan provider (Florida Blue). I called them, and after 1/2 hour on the phone, talking with many different people, was basically told that they didn't know what their number was. They gave me their Tax ID Number, so I might give that a try. If I wait until the end of the year to claim, and fill out the IRS 8885 form, I'll need "An official letter reflecting that you were an eligible individual for the months claimed..." I have no idea how to get such a letter. I wonder if PBGC would write it?
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Re: Health Coverage Tax Credit (HCTC) via PBGC

Postby rpuckett23 » Fri Jan 11, 2019 10:03 am

based on what I read the start date is 2/1 and you apply for 72.5% ...in my case about 6600 gross about 4200 net

this is awesome......offset some of the pain

hopefully we can all get this deal
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Re: Health Coverage Tax Credit (HCTC) via PBGC

Postby ahretirement » Fri Jan 11, 2019 10:42 am

The Health Coverage Tax Credit (HCTC) applies to ONLY those PBGC payees that are between the ages of 55 and 64 that pay for private health insurance. It does NOT apply to coverage bought through the Affordable Care Act portals (Obamacare) and does NOT apply to Medicare recipients. One snafu is that although the PBGC was officially the trustee of our qualified pension plan since December 15, 2017, Avaya continued to make our payments through May 2018. In November, I contacted one of Avaya's attorneys (Ameneh Bordi) that works for Kirkland and Ellis to inquire how the qualified pension payments made by Avaya after PBGC became trustee would be reported on form 1099R. I did not understand her response; so, I resent an inquiry to her today. I will followup with another post on this site if I get a response.

John Lawrence
Avaya Retiree from 2001
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