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Old 09-27-2012, 06:13 PM   #61
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Let's leave repeal out of this. Elections in a couple of weeks and then that question will be mostly settled. Still lots of implementation topics we can spend lots of time discussing.
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Old 10-03-2012, 09:54 PM   #62
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Another reason why I shouldn't have contributed excessively to my 401k over the years. Will Roth distributions count as MAGI for the subsidy?
As I understand it, Roth conversions would be included in MAGI but Roth distributions would not.
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Old 11-07-2012, 07:12 AM   #63
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Let's leave repeal out of this. Elections in a couple of weeks and then that question will be mostly settled. Still lots of implementation topics we can spend lots of time discussing.
Looks like everything is staying the same: President, Senate, House

Excellent news for those looking foward to affording healthcare in ER on a modest budget.
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Old 11-07-2012, 07:20 AM   #64
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Repeal..... What Repeal..... Unfortunately it will probably not be made any better in the next 4 so we should be thankful for what we have.

For a lot of us (me in particular) the healthcare variable is the ONLY potential fly in the ointment of a happy and affordable retirement. I feel a lot better about costs now, but it is not perfect..... yet....

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Old 11-07-2012, 08:14 AM   #65
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At the very least it would seem like any significant gutting of PPACA will not happen. There are still some parts of it which many believe seriously need work and may still change, but the core provisions are likely to remain intact.

It may be a bit safer to retire and start taking COBRA now, if you can afford it into 2014...
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Old 11-07-2012, 01:16 PM   #66
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No, they will advance you the money in 2014 to pay the HC premium and you won't have to pay back the advance if you are able to claim the subsidy as a tax credit on your 2014 return you file in 2015. Like i said, it kind of works like the stimulous checks they mailed out a few years ago, except I am not sure in what form they will advance the money or if they will just pay the insurer for you.
I re-read this thread and I'm still not sure (is anybody sure?) on how this will work.

Whether they advance money to the insurers or the individual, they cannot be serious about advancing $10K for every family in the country (who will be self paying) and then plan to chase down those who don't meet the criteria, are they? Or are they? Or....as is most often the case, am I missing something.
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Old 11-07-2012, 01:35 PM   #67
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I re-read this thread and I'm still not sure (is anybody sure?) on how this will work.

Whether they advance money to the insurers or the individual, they cannot be serious about advancing $10K for every family in the country (who will be self paying) and then plan to chase down those who don't meet the criteria, are they? Or are they? Or....as is most often the case, am I missing something.

They're pretty good at collecting taxes, and issuing refunds already; aren't they?
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Old 11-07-2012, 01:40 PM   #68
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Marko: I found this. Not sure it clears things up:

http://www.irs.gov/pub/irs-drop/reg-119632-11.pdf
Section 1411(a) of the Affordable Care Act directs the Secretary of the Department of Health and Human Services (HHS) to establish a program under which Exchanges will determine whether individuals are eligible to enroll in QHPs through the Exchange, and whether they are eligible for advance payments of the premium tax credit and cost-sharing reductions. Section 1412 of the Affordable Care Act directs the Secretary of HHS to establish a program for determining eligibility for advance payments of the premium tax credit and cost-sharing reductions that may be paid directly to an insurance company on behalf of a taxpayer.

It then goes into a lot of discussion on the application process, and coordination with Medicaid, and all sorts of things about making the application process efficient, etc.. I have to say, this is going to be really interesting!

A lot more reading here: Affordable Care Act Tax Provisions
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Old 11-07-2012, 01:47 PM   #69
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I re-read this thread and I'm still not sure (is anybody sure?) on how this will work.

Whether they advance money to the insurers or the individual, they cannot be serious about advancing $10K for every family in the country (who will be self paying) and then plan to chase down those who don't meet the criteria, are they? Or are they? Or....as is most often the case, am I missing something.
Premium assistance is advanced directly to the insurance provider based on the insured person's eligibility, which is in part based on previous year MAGI.

+1 on the link provided by JoeWras
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Old 11-07-2012, 02:00 PM   #70
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Thanks to MichaelB and JoeWras.
So, in general it WILL be based on the previous year MAGI, that would mean starting with 2013's MAGI.
I expect that there would be adjustments in situations where one's current year could be lower/higher than the previous year.
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Old 11-07-2012, 03:12 PM   #71
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At the very least it would seem like any significant gutting of PPACA will not happen. There are still some parts of it which many believe seriously need work and may still change, but the core provisions are likely to remain intact.

It may be a bit safer to retire and start taking COBRA now, if you can afford it into 2014...
My state won't let the issue die. Just voted 62% to 38% to not let the state elected officials set up a health insurance exchange unless it is approved by the voters. If I understand law correctly the federal government will just come in and set one up anyways.
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Old 11-07-2012, 03:22 PM   #72
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My state won't let the issue die. Just voted 62% to 38% to not let the state elected officials set up a health insurance exchange unless it is approved by the voters. If I understand law correctly the federal government will just come in and set one up anyways.
Yep. HHS will set up and run the exchange. Some State specific info here Health Insurance Exchanges under the PPACA
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Old 11-07-2012, 03:42 PM   #73
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I re-read this thread and I'm still not sure (is anybody sure?) on how this will work.

Whether they advance money to the insurers or the individual, they cannot be serious about advancing $10K for every family in the country (who will be self paying) and then plan to chase down those who don't meet the criteria, are they? Or are they? Or....as is most often the case, am I missing something.
My understanding is that the health insurance subsidies will be paid directly to the insurers based on MAGI from your 2012 tax return (since your 2013 tax return information will not be available when the first payment is made in January 2014). There is a true-up mechanism that will happen when you file your 2014 taxes. Conceptually, the true-up is the same as what we do now on our income taxes.

On your 2014 tax return (filed in early 2015) you will need to reconcile the health insurance subsidy you were entitled to based on your 2014 MAGI and compare it to the health insurance subsidy that you received in 2014. If you received more than you were due based on your actual 2014 MAGI you will need to pay it back - if you received less than you were due you it will get a refund. I suspect as a practical matter it will be netted with any amounts due or refundable on your 2014 income taxes.
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Old 11-07-2012, 03:43 PM   #74
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My state won't let the issue die. Just voted 62% to 38% to not let the state elected officials set up a health insurance exchange unless it is approved by the voters. If I understand law correctly the federal government will just come in and set one up anyways.
Yeah, it's mostly symbolic and much ado about nothing as I see it. If a state won't do it, that state's residents can just use the federal exchange. It's not as if the state residents can't buy through an exchange. One early concern I had about having no state-level exchange was that the federal exchange would not be eligible for the subsidies as the state exchanges would, but I think that has been addressed to the contrary.
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Old 11-07-2012, 04:13 PM   #75
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My understanding is that the health insurance subsidies will be paid directly to the insurers based on MAGI from your 2012 tax return (since your 2013 tax return information will not be available when the first payment is made in January 2014). There is a true-up mechanism that will happen when you file your 2014 taxes. Conceptually, the true-up is the same as what we do now on our income taxes.

On your 2014 tax return (filed in early 2015) you will need to reconcile the health insurance subsidy you were entitled to based on your 2014 MAGI and compare it to the health insurance subsidy that you received in 2014. If you received more than you were due based on your actual 2014 MAGI you will need to pay it back - if you received less than you were due you it will get a refund. I suspect as a practical matter it will be netted with any amounts due or refundable on your 2014 income taxes.
Ok, my MAGI for 2012 and 2013 will be high and I'll have DW's HI until the end of 2013, but if I have to withdraw an extra $15K in 2014 to pay for our HI it would put me over the $60K. If I had the subsidy to start with, I'd be under the $60K
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Old 11-07-2012, 04:21 PM   #76
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Ok, my MAGI for 2012 and 2013 will be high and I'll have DW's HI until the end of 2013, but if I have to withdraw an extra $15K in 2014 to pay for our HI it would put me over the $60K. If I had the subsidy to start with, I'd be under the $60K
Well, there's an interesting problem.

It is kind of like AMT today with state taxes. If you withhold too much, and it is returned as a refund, a whole set of complex calculations can be made to redo your AMT the following year.

I'm wondering if the same might happen with the tax code here? Don't count on it... If you have non-retirement funds set aside, hopefully you could use those to pay.
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Old 11-07-2012, 04:22 PM   #77
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Ok, my MAGI for 2012 and 2013 will be high and I'll have DW's HI until the end of 2013, but if I have to withdraw an extra $15K in 2014 to pay for our HI it would put me over the $60K. If I had the subsidy to start with, I'd be under the $60K
You could squirrel away $15k from your high 2012-2013 high MAGI in taxable savings between now and 1/1/14 to avoid the problem of having to take additional withdrawals in 2014.
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Old 11-07-2012, 04:25 PM   #78
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I haven't seen rules yet by HHS so there is still some speculation in this thread. The most recent tax return will be used, so in January 2014 that is 2012, and in June 2014 that is 2013.
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Old 11-07-2012, 04:53 PM   #79
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You could squirrel away $15k from your high 2012-2013 high MAGI in taxable savings between now and 1/1/14 to avoid the problem of having to take additional withdrawals in 2014.
Right! I've been burning up Turbo Tax all afternoon on this! Thanks for the insight.
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Old 11-07-2012, 05:08 PM   #80
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I haven't seen rules yet by HHS so there is still some speculation in this thread. The most recent tax return will be used, so in January 2014 that is 2012, and in June 2014 that is 2013.
I guess that I don't understand Wouldn't the IRS regs published in the Federal Register back last May be authoritative at this point? I agree it is very hard to follow.

What role does HHS play?

https://www.federalregister.gov/arti...ium-tax-credit

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This document contains final regulations relating to the health insurance premium tax credit enacted by the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, as amended by the Medicare and Medicaid Extenders Act of 2010, the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011, the Department of Defense and Full-Year Continuing Appropriations Act, 2011, and the 3% Withholding Repeal and Job Creation Act. These final regulations provide guidance to individuals who enroll in qualified health plans through Affordable Insurance Exchanges (Exchanges) and claim the premium tax credit, and to Exchanges that make qualified health plans available to individuals and employers.
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