From the LRRC Case Files - Week 4


Yitzchak Jacobs worked as a commission-based salesman for a furniture company while his wife was in school studying to become a Physician's Assistant. As his family grew, Yitzchak struggled to make a living as a salesman. During this time, Yitzchak received insurance through NJ FamilyCare.

Suddenly, in a very short span of time, Yitzchak's situation improved dramatically. His wife finished school and began working for a hospital, earning a salary of $100k a year. Around the same time, Yitzchak was promoted to sales manager, with a base salary of $75k in addition to residual commissions.

Question: With a combined salary of more than $175k, Yitzchak and his family are no longer eligible for government programs. How should Yitzchak inform NJ FamilyCare that he is not eligible? Yitzchak recently received his yearly recertification package from NJ FamilyCare. The letter states that if he does not reapply, he will be terminated. Should he ignore the recertification and allow himself to be terminated?

Answer: If someone believes that they are no longer eligible for NJ FamilyCare because of an increase in income, there are two ways of handling the situation. The first is to either call NJ FamilyCare and ask to be terminated or ignore your recertification request and allow the coverage to lapse. The other option is to tell NJ FamilyCare about your new income and allow them to terminate you.

It is important to understand the difference between these two options. By asking them to terminate you or ignoring your rectification (option # 1), your termination from NJ FamilyCare will be classified as a 'voluntary termination of coverage.'

By following option #2 (telling them about your new income and allowing them to terminate you), your termination will not be classified as a voluntary termination of coverage, but instead as a termination based on income ineligibility.

This distinction might not sound significant, but it can have serious ramifications. If someone's termination from NJ FamilyCare is considered voluntary, they are not allowed to purchase insurance from the Marketplace for the rest of the year.

A little background: With the passage of President Obama's Affordable Care Act, the only time a person can purchase insurance ' even through a private broker ' is during 'Open Enrollment,' from November 1st through December 15th. During the rest of the year, the only way to purchase insurance is if you are granted something called a 'Special Enrollment Period,' which you can only be eligible for under certain conditions. A person who is terminated from NJ FamilyCare due to an increase in income is granted a Special Enrollment Period and given 60 days to buy a new health insurance plan from the Marketplace.

However, if someone's termination from NJ FamilyCare is considered a voluntary termination of coverage, they are not granted this Special Enrollment Period and may be left without any insurance coverage until the next Open Enrollment period.

Another important point is that by simply asking the agency to terminate you, you are ensuring that you will be kicked off the program. This is not necessarily wise. Eligibility guidelines for government programs are complicated. While you may believe you are making too much money to be eligible to receive benefits, the truth may be that you actually are eligible. Telling them about your income change allows them to evaluate your status and determine whether you should be removed from the program.

Tip: You must inform NJ FamilyCare about changes in income as they happen and not wait until recertification time.

Top Tips from Mr. Klugman - Housing Case Manager

Number of encounters in the past month: 100

Key Skills:

  • Knowledge of all First Time Homebuying programs and ability to direct clients to the program that is best for their particular needs

There is one infamous area that causes us endless frustration and occasional bemusement 'The My Friend Said Effect.' Every day, clients confidently inform us of 'facts' they picked up from friends and family. Having listened to endless amounts of these factoids, we can tell you one thing: Verify all information first! Besides for possible misinformation, another point to consider is that every person's financial situation is different and what may worked for someone else may not be available, or be the best option, for you. Just because your friend or brother received a specific mortgage, it does not mean that you will qualify.

The same advice is true for all the programs. It takes us many months of training to become proficient in the rules of the various programs. Program rules are complicated and ever-changing and there are many nuances that affect eligibility. Don't make any important decisions without talking to a professional first.