Anyone else *not* taking the subsidy?

[geekette]

DH was laid off last May.  He declined unemployment, though he was eligible, and has (at least temporarily) retired.  We're happy that the ACA plans are available, so at least we can get insurance.

We have little income (some dividends), but enough cash on hand to last the year.  This means we can manipulate our reportable income by selling stock or doing a Roth conversion to qualify for any level of subsidy.  However, he doesn't want to take the subsidy, since he thinks we can "afford" the premiums regardless.

Ethical?  Too ethical?  Nuts? 

[randymarsh]

It's ethical either way.

Similar discussions have occurred here before. Is the ACA subsidy OK? Is free lunch for your kids? Etc. Everyone seems to have their own answer.

But do you apply "I can afford the regular price, so I'll pay it." to other aspects of your life? Would you not claim the mortgage interest deduction? Not list children as dependent?

[geekette]

I'd seen threads on how to adjust your income to qualify, but hadn't seen anyone mention not taking it. 

I went to a BCBS sales office because of some discrepancies between the healthcare.gov site and quotes for the same plan on their site.  The sales guy (also flummoxed by the pricing differences) went through our application with me and really raised an eyebrow when I said we didn't want to take the upfront subsidy.  "You're the first one to say that".

Not taking the mortgage deduction never crossed our minds, and we would have listed kids if we'd had them, but I doubt we'd have taken the free lunch, and this seems to fall in the same area. 

[dragoncar]

Assuming that he paid taxes, I think it would be ethical for him to have taken unemployment and any other programs available

[Villanelle]

Do you take the child tax credit?  Do you deduct mortgage interest paid?  I don't see how this is any different. 

[goatmom]

Sounds like he is not looking for a job.  I think that is why taking unemployment is a problem.  When I got out the Army, people told me I was eligible for unemployment.  But I got out to be a SAHM.  So, I didn't collect it.  I think is would have been unethical for me.

[dragoncar]

Sounds like he is not looking for a job.  I think that is why taking unemployment is a problem.  When I got out the Army, people told me I was eligible for unemployment.  But I got out to be a SAHM.  So, I didn't collect it.  I think is would have been unethical for me.

Oh, missed that part.

[CommonCents]

Sounds like he is not looking for a job.  I think that is why taking unemployment is a problem.  When I got out the Army, people told me I was eligible for unemployment.  But I got out to be a SAHM.  So, I didn't collect it.  I think is would have been unethical for me.

And against the rules.  To take unemployment you need to certify you are looking for employment.  You did the right thing.

[beltim]

If you're that low-income, aren't you unable to buy an exchange policy, because you're given Medicaid instead?

You could still buy a policy, but in that case you wouldn't be eligible for a subsidy.  This is actually a substantial problems in states that did not expand Medicaid eligibility.

[geekette]

Sounds like he is not looking for a job.  I think that is why taking unemployment is a problem.  When I got out the Army, people told me I was eligible for unemployment.  But I got out to be a SAHM.  So, I didn't collect it.  I think is would have been unethical for me.

After his severance ended, he applied for and was offered a job, which he declined.  At that point, no, he wouldn't have been eligible.

He's making a distinction between a tax deduction and an outright tax credit.  It would bother him to hear people say "This (barely a) millionaire is taking an Obamacare tax credit!" (and I don't want to give conservatives ammo against the ACA).

[brewer12345]

I think you are nuts.  This is now just part of the tax code like anything else.

[Tyler]

I admire your husband for wanting to defer to those who need the money more than he does, but I personally would go about this a different way.  Accept the money to which you are legally entitled, and then if you have more than you need donate the equivalent amount to the charity of your choice.  That way you can both insure that your gift is used in a way you prefer to help others (rather than lost in government bureaucracy), and also use the tax deduction from the donation to free up funds to help even more people.

[lackofstache]

I admire your husband for wanting to defer to those who need the money more than he does, but I personally would go about this a different way.  Accept the money to which you are legally entitled, and then if you have more than you need donate the equivalent amount to the charity of your choice.  That way you can both insure that your gift is used in a way you prefer to help others (rather than lost in government bureaucracy), and also use the tax deduction from the donation to free up funds to help even more people.

+1

[szmaine]

My brother was on unemployment a while back and he had to show proof he had actually applied to so many jobs per week and have regular appointments at the unemployment office for review and help with placement..you don't just sit back and relax while collecting. So if your husband didn't really want a job that makes sense.

If you are entitled to the subsidy based on low income then take it, if you have to manipulate your numbers to qualify...it may be perfectly legal...is it ethical? That your call.

But just ask yourself how you'd feel about someone hiding income to qualify for food stamps, or living off a trust fund but had some small income from something they did that year any getting several thousands of the EITC.

[greaper007]

My mom is a semi-retired millionaire and was excited to tell me that she thought she would get an ACA credit.    I thought that was slightly mentally challenged.

It depends on your situation though.    You guys paid into unemployment insurance for years.    I don't see a problem with taking some if you're eligible, it's not the same as welfare.

[geekette]

I admire your husband for wanting to defer to those who need the money more than he does, but I personally would go about this a different way.  Accept the money to which you are legally entitled, and then if you have more than you need donate the equivalent amount to the charity of your choice.  That way you can both insure that your gift is used in a way you prefer to help others (rather than lost in government bureaucracy), and also use the tax deduction from the donation to free up funds to help even more people.

This might work.  And I agree with Maigahane that it may well end up means tested, and I'm fine with that.

We're not hiding income, though, just living off savings, some of which will count as income once sold or converted.

[seattlecyclone]

My opinion is that you should take all of the tax credits for which you are legally entitled. You may disagree that millionaires should be eligible for the health insurance tax credit if their income is low enough. On the other side, you're not allowed to evade paying taxes that you don't agree with (but owe anyway), so why should you feel obligated to avoid claiming credits that you don't agree with (but can legally claim anyway)?

I do think the idea of donating that money if you don't need it is solid.

[milla]

It sounds ridiculous. Why on Earth would anyone except you and him know how much he pays for his health insurance or what subsidy he is taking? You will take it when you file your taxes anyway. It's just.. there... it's not a moral issue.
Taking unemployment when he is not looking for work is a different animal. You have to be looking for work to qualify for it. You don't have to "be poor" or "not a millionaire" to take the healthcare subsidies. It's not like buying things on sale because you can afford to pay full price up front and then get a rebate in the mail. ??! Makes no sense at all.