Author Topic: ACA subsidies and lay off  (Read 1567 times)

spartana

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ACA subsidies and lay off
« on: May 07, 2018, 03:20:16 PM »
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« Last Edit: June 27, 2018, 02:12:06 AM by spartana »

MDM

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Re: ACA subsidies and lay off
« Reply #1 on: May 07, 2018, 04:48:25 PM »
Don't know, but has she tried https://www.healthcare.gov/ to see if that is helpful?

DreamFIRE

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Re: ACA subsidies and lay off
« Reply #2 on: May 07, 2018, 05:23:02 PM »
Correct about COBRA.  One you start it, stopping it prior to 18 months does not count as a qualifying event for ACA, so she would  have to wait until the enrollment period if she wants to stop COBRA prematurely.

I've always considered the year's income, including capital gains, dividends, interest, etc. and the FULL SS income, to count towards the ACA income MAGI, even in my own calculations looking ahead.

Padonak

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Re: ACA subsidies and lay off
« Reply #3 on: May 07, 2018, 08:02:24 PM »
One qualifies for unemployment insurance only if they are available and actively looking for work. What if she temporarily stopped looking for work say a month before UI runs out? Or whenever the total annual income was just below qualifying for insurance?

IANAL (I am not a lawyer).

MDM

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Re: ACA subsidies and lay off
« Reply #4 on: May 07, 2018, 08:48:41 PM »
So if she choose to go on COBRA June 1st until the next open enrollment (which I believe is mid-Oct to mid-Dec) then she would be able to cancel COBRA during that time and apply for an ACA plan (or Medicaid if no longer receiving unemployment) and doesn't have to do COBRA for the full 18 months? That appears to be what the website @MDM posted says but I've heard that once you go on COBRA you have to do the whole 18 months first.
That is the healthcare.gov site, so it should be accurate for ACA-related issues, much as the irs.gov site should be accurate for tax-related issues.

cchrissyy

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Re: ACA subsidies and lay off
« Reply #5 on: May 07, 2018, 08:55:55 PM »
when you apply, you enter your current income and choose your monthly plan with its price adjusted for some monthly subsidy.

but that's just estimated. your real subsidy is based on annual income and you find out the actual figure when you file your federal income taxes. if they gave you "too much" of a subsidy you have to pay it back in april.

cchrissyy

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Re: ACA subsidies and lay off
« Reply #6 on: May 07, 2018, 09:27:09 PM »
yes if the monthly subsidy was less than the taxes say it should have been, you it all back on your tax refund.

MDM

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Re: ACA subsidies and lay off
« Reply #7 on: May 07, 2018, 09:29:21 PM »
What happens if you paid too much? Do you get that refunded at tax time?
Yes.

See About Form 8962 | Internal Revenue Service.  Although, it makes a lot more sense if one has a Form 1095 A.

teen persuasion

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Re: ACA subsidies and lay off
« Reply #8 on: May 08, 2018, 11:40:41 AM »
Our experience with NYStateOfHealth a few years ago when DH was between jobs is that there are 2 competing calculations the state will want to do.  I'd calculated our annual income, and figured that we were eligible for ACA, but the state wanted our monthly income to first determine if we were eligible for Medicaid.  If your monthly income makes you eligible for Medicaid, then you are not eligible for ACA subsidies, regardless of your annual income.  When your monthly income changes, you might get ACA.

At least in NY, I believe there is continuous open enrollment for Medicaid.  Although, there is a lag time before coverage begins: if approved before the 15th of the month, coverage can begin on the first of the next month.  If after the 15th, then coverage begins on the first of the month after the next month.  So begin the process early!

MDM

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Re: ACA subsidies and lay off
« Reply #9 on: May 08, 2018, 08:32:38 PM »
Do you, or anyone, know what happens if you buy an ACA plan and then once you do your taxes you find you were too low on your "annual" income for any subsidy and only qualified for Medicaid,  but too high on monthly income to qualify for Medicaid during individual months? Is there a penalty or repayment or do they just let it go? I guess in these cases you need to be careful how much you invest in your  tax deferred investments and don't put too much into a 401K.
No comment on Medicaid implications (I just don't know) but if a good faith estimate of income >100% of the federal poverty line (FPL) was made, Advance Premium Tax Credits were received, but actual income was less than 100% FPL, in general they just let it go.

See line 6 and instructions for it in About Form 8962 | Internal Revenue Service for details.

jim555

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Re: ACA subsidies and lay off
« Reply #10 on: May 08, 2018, 08:38:06 PM »
My UI ran out mid year and I dropped into Medicaid, but the yearly income was way over Medicaid but it didn't matter since Medicaid is monthly not yearly.

Medicaid is not a subsidy and is not reconcilable at tax time.