Applying for ACA with drastically different MAGI - tell your stories

[FIence!]

I know I've seen a few mentions on here about people applying for marketplace coverage when they know their income will be much lower than the previous year. Typically, the person states "some paperwork/proof was involved" and then they were approved. We are anticipating that (by choice) our household income for 2016 will be about half of 2015, which would qualify us for a subsidy. I would like to hear the details of applying for anyone who has been in a similar situation. What sort of proof or paperwork was required?

(Also, I tried to search to see if anyone had already asked this, but search kept timing out, so apologies if this topic has been covered...)

[Tyler]

I've done it. 

The thing to remember is that they always compare your stated future income to the last tax return they have on file.  So when applying for 2016 health coverage, they look at your 2014 taxes.  2015 actually won't come into play at all except perhaps as part of your documentation for why things changed.

I FIREd at the end of 2014 and applied for 2015 health coverage knowing that I could use my investments to optimize my reported income for tax purposes.  To make the process easier, I planned ahead and made sure that my investment income for 2014 exactly matched my projected income for 2015.  That way I was able to provide two documents to "prove" my prediction: 1) a "he doesn't work here anymore" letter from my employer to show I would have no earned income, and 2) a brokerage statement with investment income that was exactly what I said it would also be in 2015.  I should note that when they reviewed the files, they took that number quite literally and did not round like I did on my application. 

This year, I started to get spammed by "you're at risk of losing your subsidies in 2016" emails because they do not look at what you last qualified for after their review, but again at income from two years back when I was still working.  Since I have a part time gig right now and my income is less predictable, I decided to pay the full premiums and work out the full (likely large) refund when I ultimately file my 2016 taxes in 2017.  They don't require proof of income when you claim fewer subsidies up-front than what your old tax file says you'd qualify for.   

[FIence!]

Thanks, Tyler!

What's troubling for us is that we have no such statement. The "doesn't work here anymore" letter is not a problem, but we are planning to live off earned income, just on a part time basis from self employment. So our income number is projection/guessing as far as they are concerned probably...

Has anyone had luck working off numbers where they didn't have a brokerage account document, pension statement, or something else that equates to a pre-documented number for next years income?

[peoria]

I have applied for 2016 due to an expected/planned income change.

I entered my expected income for next year, and I have until January 30th to send in documentation of my lower income.

Below is what they sent me:
You need to send the Marketplace proof of your yearly income for all members of
your household that will earn income and are required to file a tax return. Send documents that closely
match the income amount from your application. You don’t need to send proof of income that you no
longer receive.
Examples of documents you can send include:
 · 1040 tax return (federal or state versions acceptable) - Must contain first and last name,
income amount, and year.
 · W2 and/or 1099s (includes 1099 MISC, 1099G, 1099R, 1099SSA, 1099DIV, 1099S, 1099INT) -
Must contain first and last name, income amount, year, and employer name (if applicable).
 · Pay stub documentation - Must contain first and last name, income amount, and pay period or
frequency of pay with date of payment. If a pay stub includes overtime, please indicate average
overtime amount per paycheck.
 · Self-employment documentation (includes 1040 Schedule C, most recent quarterly or year-to-
date profit and loss statement, self-employment ledger) - Must contain first and last name,
company name, and income amount. If submitting a self-employment ledger, include dates
covered by the ledger, and the net amount from profit/loss.
 · Social Security statements (Social Security benefits letter) - Must contain first and last name,
benefit amount, and frequency of pay.
 · Unemployment Benefits (Unemployment Benefits Letter) - Must contain first and last name,
source/agency, benefits amount, and duration (start and end date, if applicable).
These documents don’t necessarily need to be dated for 2016. For example, you can provide recent pay stubs if you don’t expect your income to change in 2016. If you expect your income to go up or down in 2016, you can provide other documents, like a document that states when contract work will end. If any of your income comes from freelance work, you can fill out a self-employment ledger that includes your expected income.
If you don't send it by the following date, you may have to pay more for coverage because your tax credit and lower copayments, coinsurance, and deductibles may end: January 30, 2016.

[peoria]

I intend on waiting until I get my first lower paycheck and sending that as proof.

[FIence!]

Peoria, when did you apply for coverage? I've seen information that indicates previously applicants had 90 days to verify income; is it actually less time?

[peoria]

I applied on November 1st.
I had figured the deadline was based on the end of the first month of the healthcare, but as it is January 30th, not 31st, 90 days may be correct.

[FIence!]

Thanks, Peoria. 90 days seems right!