ACA in first year of ER

[Trudie]

I get fuzzy on how we will qualify for ACA subsidies in the first transitional year in retirement when we will be coming off a year where our AGI is above the threshold.

I anticipate that we will both cease having W-2 income at the end of the calendar year or by no later than February of the following year.  Once retired, we will take distributions from our accounts in such a way that we are eligible for subsidies (per line 37 of our tax form).  But how do you "prove" that you are subsidy-eligible when signing up for coverage when they have all that wage-earning/tax-paying history to rely on?

Thanks.

[Spork]

That's a damn good question.

Several of us have done it... but I really do not think the healthcare.gov people are consistent in how they deal with applicants.  IMO, you're getting someone that's inexperienced and just working a job moving papers around.  This seems to work for the cookie cutter applicants, but not so much for the things that fall out of the norm (like us.)

I went round and round with them and finally gave up.  AFTER I gave up, I got "congrats you're approved".  AFTER getting approved, I still get once a month mails saying they need more data.  (It shows approved on healthcare.gov and I'm still getting subsidies, so I'm just being silent.)

I feel like every time you upload documentation to healthcare.gov you create a new thread... and different people are working on the different threads.  They ask for more data... you give it to them... new caseworker on new thread while old case worker works the original thread with new documentation.

Bottom line: there really seems to be no rhyme or reason to it.  I decided to give them everything they wanted, including last years taxes which mean nothing for next year.  I also gave them a letter from my employer stating I voluntarily retired and about 3 different letters from myself breaking down how I was funding my retirement on a month-by-month withdrawal schedule.  I gave them summary pages of the accounts I would withdraw from and previous dividends.

I then just decided "screw them... if they reject me, I'll pay the full price and get a refund in 2017."  Don't fret too much over it.  You can't predict them.

[Spitfire]

I wonder if this varies by state. Here in Florida I have helped a friend of mine sign up for ACA subsidies, and all it required was me putting in a number of how much I think she will make. Once I did that it showed the health plans with the subsidized premium and co-pays. It didn't ask for any proof. 

[Blueskies123]

This was confusing to me too and I knew my income would be too high for subsides when I retired in August of 2015.  I did not want to take any risks so I paid for COBRA during the last half of 2015.  We went on ACA January 2016.  When I signed up in 2016 I just typed in my much lower income figure which entitled me to a large subsidy.

[secondcor521]

In general, you tell the government when you apply for ACA what your estimated income is for that year.  They'll provisionally approve you.  If that doesn't make sense to them given the data they have, they'll ask you to justify it.  You send in your justification.  They'll then decide if they need more data.

I'm at the point where I sent in my justification letter a few weeks ago.  Since my situation is unusual, I just wrote a one-page letter addressing their questions logically and point by point, with screenshots and Quicken reports and statements to support what I was saying.  I haven't heard back yet.

[Spitfire]

That makes sense, the number I entered is in line with her tax filings, so I guess they didn't need to see any proof.