First year of FIRE done! Check my #'s in ref to ACA please?

[Melf]

Hey all!  This week marks the end of my first year of FIRE.  So far, so good.  I'm staying on budget and everything's going well since the markets are at record highs.  I must admit that a HUGE portion of my stash is sitting in cash due to rolling over my work 401K to an IRA and never investing most of it due to waiting on a market decline that never came.  I'm not too worried since the first two or three years of FIRE are  being covered by cash savings anyway.  I'll get it all invested soon one way or another.  My yearly budget is just over 2.5% of my total stash so I'm not too worried about not being totally invested.  I would probably be a millionaire though had it all been invested!

My big concern at this point is to make sure I have my numbers straight as far as my AGI/MAGI for my ACA subsidies.  I enrolled in ACA back in August after my COBRA benefits thru my previous employer were no longer subsidized.  When I enrolled, I estimated my gross income for this year to be $21K.  This gave me a nice ACA subsidy every month and I'm paying around $20 a month for my silver level plan premium.

I believe my gross income is actually going to be right around $16.6K for the year.  This income is made up of my last bonus from work that was paid out earlier this year, all of my reinvested dividend income from my taxable investment account and a $4K tIRA to Roth IRA conversion I did last month.  The dividends total include  estimates of what will be paid out before the end of 2017.

Taxable acct div's - $5599
Work bonus - $7004 gross
Roth Conversion - $4000

Total taxable income for 2017 - $16,603

Am I looking at all this correctly as best you can tell?  I just don't want to start filing taxes early next year just to find out that I'm counting something as income that I shouldn't have and that I didn't actually qualify for the ACA subsidy that I thought.  I just enrolled for ACA for 2018 and I'm using $16K as my projected gross income for next year.  This income should also come from my taxable account dividends and an IRA conversion amount as needed to hit the $16K.  Anyone see any mistakes?  Thanks for any feedback.  I might not be FIRE'd now if it weren't for all of you great folks!

Marlan

[jim555]

Did your state expand Medicaid?  Looks like you are under $16,643 so you should qualify.

[Melf]

North Carolina did not expand Medicaid and did not create their own healthcare exchange for the ACA.  I purchased my coverage on healthcare.gov.  I'm thinking that I should be OK as long as all of the income listed in my original post counts toward my MAGI.  That puts me close to 138% of the $12,060 FPL from what I've seen.  I believe the highest subsidies were around this level.  I just didn't want to be making a mistake and fall below the 100% level and be told that I should have been on Medicaid.

[jim555]

North Carolina did not expand Medicaid and did not create their own healthcare exchange for the ACA.  I purchased my coverage on healthcare.gov.  I'm thinking that I should be OK as long as all of the income listed in my original post counts toward my MAGI.  That puts me close to 138% of the $12,060 FPL from what I've seen.  I believe the highest subsidies were around this level.  I just didn't want to be making a mistake and fall below the 100% level and be told that I should have been on Medicaid.

If you are under 100% you would fall into the gap and get nothing.

[Melf]

If you are under 100% you would fall into the gap and get nothing.

Thanks Jim.  As long as the income I listed previously counts toward my AGI for 2017 then I believe I'm in great shape.  I was just concerned that I might make a mistake of some sort since this is my first go with getting ACA subsidies and not having regular income from working.  I'm not as familiar with all of this financial stuff as a lot of the folks on the forum here.  I didn't want to find a problem in Jan 2018 when it was too late to fix it and then have to pay back the ACA subsidies I've been getting for August thru December.

[honeyfill]

Just curious. If I understand your dilemma, you seem to be concerned about having sufficient income to make sure you don't fall into medicaid gap.  Why not just pull a little more out of your taxable investments or get a part time job for the rest of the year?  You'll easily stay above the minimum income and a few thousand more will have only a minimum effect on your subsidy.

[Melf]

Just curious. If I understand your dilemma, you seem to be concerned about having sufficient income to make sure you don't fall into medicaid gap.  Why not just pull a little more out of your taxable investments or get a part time job for the rest of the year?  You'll easily stay above the minimum income and a few thousand more will have only a minimum effect on your subsidy.

I can easily do another IRA conversion if needed.  I was really just trying to confirm whether or not I needed too.  Thanks.

[CanuckExpat]

And to clarify, if your income ends up being too low, so that you are in the Medicaid region, you don't have to pay back premium tax credits correct?
You might only end up repaying them if your income is higher then you estimated.

Also, if you are below certain income limits (200% or 400% of FPL) there are limits on the maximum that you would have to repay

[Melf]

And to clarify, if your income ends up being too low, so that you are in the Medicaid region, you don't have to pay back premium tax credits correct?
You might only end up repaying them if your income is higher then you estimated.

Also, if you are below certain income limits (200% or 400% of FPL) there are limits on the maximum that you would have to repay

Thanks CanuckExpat.  I'm definitely erring to the low side as far as the income.  Not worried at all about going over the limit.  My income right now puts me at 137% of FPL as long as it all counts toward AGI.  I just didn't want to fall below 100% of FPL and find out I was on the hook for my entire Silver level premiums for AUG - DEC of this year or possibly something worse.  I was looking at the IRS form 8962 earlier.  Parts of it are confusing since I was on COBRA from my previous job for the first part of the year and then on an ACA policy beginning in AUG.  I may get a few dollars of the premiums I've been paying back since I think the AGI that I used in my ACA application was a little higher than what I'm projecting now.

[whiskeyjack]

Don't you want to be just over 138% because the medicaid gap exists from 100-138% FPL?  Apologies if I'm interpreting something wrong here.

[Melf]

Don't you want to be just over 138% because the medicaid gap exists from 100-138% FPL?  Apologies if I'm interpreting something wrong here.

From what I have read, you only need to be above 100% of FPL in non-expansion states.  In those states that did expand Medicaid, the eligibility level was expanded up to 138% of FPL.  I think I'm OK at just below 138% here in NC since we didn't expand Medicaid.  Does anyone understand this any differently?

[jim555]

Don't you want to be just over 138% because the medicaid gap exists from 100-138% FPL?  Apologies if I'm interpreting something wrong here.

From what I have read, you only need to be above 100% of FPL in non-expansion states.  In those states that did expand Medicaid, the eligibility level was expanded up to 138% of FPL.  I think I'm OK at just below 138% here in NC since we didn't expand Medicaid.  Does anyone understand this any differently?

This is how I understand it.

[Melf]

I don't seem to be having an issue with my 2018 ACA re-enrollment and subsidies.  For 2018, I projected my income to be $16K and that computes a $784 monthly Premium Tax Credit for me.  The only reason for my original post trying to verify my 2017 income for my AGI is that I projected my income to be $20K rather than the $16.6K that I'm currently calculating.  The information I mentioned previously about the FPL percentages came from the Kaiser Family Foundation and obamacarefacts websites so I'm fairly comfortable with its accuracy.

[whiskeyjack]

Don't you want to be just over 138% because the medicaid gap exists from 100-138% FPL?  Apologies if I'm interpreting something wrong here.

From what I have read, you only need to be above 100% of FPL in non-expansion states.  In those states that did expand Medicaid, the eligibility level was expanded up to 138% of FPL.  I think I'm OK at just below 138% here in NC since we didn't expand Medicaid.  Does anyone understand this any differently?

This is how I understand it.

You've both got it right.  I live in a medicaid expansion state, so I have to stay over 138% to stay in the ACA.
This site has a nice chart:  https://www.kff.org/uninsured/issue-brief/the-coverage-gap-uninsured-poor-adults-in-states-that-do-not-expand-medicaid/

The gap exists between 44% FPL and 100% FPL

[jim555]

The gap is from 0% to 100% in a non-expansion state.  Non-disabled adults without dependent children are ineligible for Medicaid coverage in those states.