A client approached our individual health insurance team to research coverage options for him and his wife. Although nearing retirement, the individual left his previous employer to pursue his dream of starting a consulting firm. He and his wife were approaching the end of their 18-month COBRA continuation coverage, so they needed to put adequate coverage in place.
An individual assessment was completed for the couple to determine factors that influence coverage eligibility and cost. Following a consultation, it was discovered that the couple qualified for the Health Coverage Tax Credit (HCTC) due to his wife’s retirement pension plan. For those that are not familiar, the HCTC was established to help cover the cost of health insurance for individuals whose pensions are trusteed by the Pension Benefit Guaranty Corporation (PBGC), a U.S. Government Agency. It is a federally-funded program administered by the IRS that pays a portion of qualified health insurance premiums for eligible individuals and their family members. The discovery of this qualification was significant; however, coverage needed to be placed with an eligible plan sponsor in order to qualify for the HCTC according to IRS regulations.
In the course of researching solutions for the couple, it was determined that traditional individual health options would not qualify as an “eligible plan” according to the HCTC. Therefore, alternative options would need to be considered. Further research concluded that coverage through the Comprehensive Health Insurance Pool of Nebraska would qualify. Although the regulations concerning eligibility in the pool are restrictive, both individuals were screened according to enrollment guidelines for the insurance pool and were deemed eligible. The appropriate forms were submitted and coverage was established.
In the end, additional research paid off and the most appropriate coverage for the couple was placed. The established coverage will serve the customer’s coverage needs until retirement and ultimately save them money through the utilization of the tax credit.