The IRS has announced an October 1, 2018 deadline for submitting Form 14095 to request reimbursement for premiums paid directly to Blue Cross Blue Shield Michigan if you are an approved Health Care Tax Credit (HCTC) AMP (Advance Monthly Payment) recipient. If you wish to receive reimbursement for any 2018 payments, you must complete Form 14095 and mail to the IRS to arrive no later than October 1, 2018. Forms received after October 1, 2018 will not be processed and you will need to seek credit for those premiums when filing your 2018 IRS tax return.

To All DSRA Benefit Trust Enrollees with a Qualified Family Member

The purpose of this communication is to review the eligibility duration limits for both the Health Coverage Tax Credit (HCTC) and the DSRA Benefit Trust subsidy provided for the retiree’s Qualified Family Members (QFM). Spouse and dependents claimed on retiree’s tax return are considered qualified family members. The HCTC regulations governing QFM eligibility have generally always limited the younger spouse and other dependents eligibility to a maximum of 2 years once the retiree reaches Medicare eligibility. The Trust has always followed a plan to increase the “combined subsidized” retiree vs. spouse age gap window by another 2 years for a total of 4 years. The Trust cannot match the magnitude of the amount of the HCTC premium subsidy, but our goal was to soften the blow from the loss of the HCTC. Based on age data of our enrollees, it was determined that 4 years of combined subsidy assistance would cover more than 90% of our affected enrollees.

For 2018, eligibility for a subsidy is as follows:

  • HCTC Subsidy: In most situations, pre-65 QFM’s are covered for up to 24 months by the HCTC starting with the month the retiree is eligible for Medicare. This period of eligibility is usually in effect when the retiree is age 65 and 66. The QFM HCTC eligibility normally ends the first of the month the retiree turns 67. It is the responsibility of the retiree and the enrollee to discontinue the HCTC subsidy upon expiration of the 2-year eligibility window. Neither the IRS or BCBSM will monitor your month to month HCTC eligibility. This understanding is especially important for those that are using the Advance Monthly Payment Process provided by the IRS.
  • DSRA Benefit Trust Subsidy: Each family of a pre-April 2, 2009 salaried retiree is eligible for the $370/month Trust subsidy for a maximum of 24 months while the QFM’s are under the age of 65. Eligibility for the Trust provided subsidy begins the month following the cessation of the IRS administered HCTC QFM subsidy. You cannot receive both the HCTC and the Trust subsidy for the same month. The enrollee must complete a new BCBSM enrollment form specifically requesting the subsidy. The Trust subsidy is paid from the DSRA Benefit Trust funds for eligible QFM’s if the salaried retiree is either age 67 or 68. Eligibility for the Trust subsidy ends the first of the month the retiree achieves age 69, or the QFM achieves their 65th birthday or goes on Medicare themselves. BCBSM should automatically update your invoice to the full premium amount for the month the retiree achieves age 69. Your plan and coverages will remain the same.

Looking ahead to the 2019 plan year, if you will lose eligibility for either the Trust subsidy or the HCTC during 2019, please keep the premium cost under consideration this November during Open Enrollment. If you feel it is in your best interest to change plans as a result of either of these events, BCBSM has agreed to call both of these situations a “qualifying event” and allows you 30 days to change plans mid-year.

DSRA Benefit Trust

If you utilized the IRS Advance Monthly Payment Process for the payment to BCBSM of your monthly health insurance premium, you need to read this update.

IRS Form 8885 has an omission that you need to understand.

Look at Form 8885. On the top half of the form, in Part I, the 2nd bullet is not correct. The statement should have included these words at the very end of the sentence- or the US Treasury- HCTC. Here is the entire corrected statement-

  • You and/or your family member(s) were covered by HCTC-qualified health insurance coverage for which you paid the entire premiums, or your portion of the premiums, directly to your health plan or the US Treasury-HCTC.

Therefore, Part I reads totally different with the inclusion of the US Treasury. This means retirees utilizing the AMP should check the box for each month they received the HCTC via the AMP.

The letter you received with your 1099-H from the IRS is correct. Please read it carefully. All AMP enrollees are required to complete the 8885 form and submit with your tax return. If you have already submitted your tax return and did not check the appropriate months boxes, you should file an amended return before the April 15 tax deadline. 

In Part II line 2 of Form 8885, the statement is correct as printed. Do not confuse the change made for line 1 above with what this line is asking. For example, if all 12 months of your premium were paid through the AMP, lines 2-5 should all be ZERO.

You do not need to include the 1099-H form with your tax return.

Lastly, we are aware that Intuit’s Turbo Tax has a flaw and will not allow a zero entry for line 2. If you try to force the entry, we believe your form will not be included in the e-file return to the IRS. The IRS and Intuit are working to resolve the problem.

If you are a Turbo Tax user and you want to be notified by Turbo Tax when the bug is fixed, click on the link below and register with Intuit.

https://ttlc.intuit.com/questions/4237111-the-healthcare-coverage-tax-credit-form-8885-line-2-incorrectly-flagging-an-error-for-a-0-entry

DSRA BT Board

PBGC Pension Recipient Age Up From 64 to 65 – Spouse Under Age 65

2 Person Contract

PBGC pension recipient turns 65 in May (their BCBSM medical ends April 30th).

Mail letter to the IRS on April 10th stating that PBGC pension recipient will be eligible for Medicare May 1st.  Include PIN and SS# in this letter.  This will key them to cancel the PBGC pension recipient in their system.  In the same envelope include Form 13441-A for their Qualified Family Member (QFM).   A sample form here is at the DSRA-BT website.  Be very careful that you have the correct premium, both total and 27.5%, for the correct individual HCTC plan.

BCBSM will establish a new contract for spouse only of same metal tier but in a non-HCTC division 60 days before the retiree turns 65.   The spouse may see an invoice from BCBSM for the full amount of the premium in the month prior to the PBGC pension recipient turning 65.  DO NOT pay this unless there is a delay in getting a new PIN number from the IRS and you are not able to make the May 10th payment cut-off.

Once the spouse receives their enrolled letter from the IRS, fill out a new BCBSM enrollment form DSRABT17 and check the HCTC box at the top.  Include your new PIN number on the enrollment form and a copy of your letter from the IRS.   To speed this process it is recommended that you email or fax this information.

Print out the IRS payment coupon (Form 13973) and make new payment to US Treasury - HCTC by May 10th.

If payment cannot be made by the 10th of the month, full payment must be made to BCBSM.

BCBSM in this instance must indicate in their records that the retiree made the payment.  In this situation, the IRS has introduced a new procedure that allows the HCTC AMP enrollee to request an immediate refund of the 72.5% HCTC credit. The retiree files form 14095 with the IRS for HCTC refund for the month of May. (Up to 12 week turnaround time.)  Form available at the IRS website or the DSRA-BT website.

BCBSM has told us that they will not send out a letter this year stating your plan is considered qualified for the HCTC. They have however sent out forms 1099-H and 1095-B. The IRS has informed us not to instruct HCTC enrollees to include a copy of the 1095-B as “proof” of coverage when you file your tax return. The reason being it is an affordable care act document and inclusion might imply you are not eligible for the HCTC.

If you are in the AMP in 2017, BCBSM has turned off your access to your previous payment history at their website. For those of you who were in the HCTC AMP for part of 2016 we recommend that you include a copy of the following documents with your tax return:

  • PBGC 1099R with the Payers name and the reference to the Delphi Retirement Program circled
  • Bank records showing payment date and amount – if you are using your statement as proof of payment, verify that it does clearly show BCBSM in the description. If not, we recommend that you write a note on the statement that the highlighted charge is to BCBSM.
  • Copy of page 26 from the 2016 Guide to Benefits booklet with the plan you were enrolled in circled so they can see the correlation to your bank records. This can be accessed at the following link 2016 Guide page 26.
  • Copy of your 2016 enrollment form. If you did not retain a copy we would suggest that you fill one out again as if it were the original and include copies of pages 1,3, 5 & 6. A blank form can be obtained at this link Blank Form.

Remember, you can only claim the months you paid the full premium. Do not include months that you were in the AMP.

For those not in the AMP, you have access to your payment history at the BCBSM website and can use that as proof of payment rather than bank records if you prefer.

If you do not have bank records or access to your previous payment history on the BCBSM website, we suggest that you call BCBSM customer service at 1-877-354-2583 and request a copy of your proof of payment be mailed (or emailed) to you for the months you need.

DSRA-BT Board of Directors

The IRS will now accept your check or money order due no later than February 10, 2017 for your insurance premium payment for the month of February.  Please remember, premium payments received before the 22nd of the month prior to the premium payment will be returned to the sender. 

 

  • Example:  Plan participant premium window for February 2017 premium payment is January 24th-February 10, 2017.  If you make your payment outside of this window, you may be required to pay 100% of the cost for your insurance premium the month of February. This window applies to the window for every month of 2017

 

If your 27.5% premium payment is not received by the IRS between the 24th of the current month and the 10th of the month your premium is due, you will have to pay 100% of that months premium directly to Blue Cross Blue Shield of Michigan and you will have to request an IRS refund of the 72.5% on your federal tax return the following year.  We strongly encourage you to send your payment along with the completed voucher during the specified window in order to avoid paying 100% of the month’s premium.

 

DSRA-BT Board


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