ACA after you resign

[tmm99]

I know there are tons of threads regarding ACA, but I didn't think I needed to know about it yet, so I wasn't reading them - Just to warn you that I am quite ignorant of how it works, except that the lower the income, the cheaper the premium, sort of thing.

If I quit my j*b next month, is Cobra the only option I have, or I can get on the ACA? If ACA, do they base my premium on my last year's income (that may make my ACA preimum as high as the Cobra) or they will base it on this year's projected income (this year's projected income would be 1/4 of what I made last year.)

 

[FUEGO]

Subscribed. DW is on the verge of quitting. I told her to do it at the very beginning of the month so her HI from work would continue through month end and we could figure out ACA during that month (probably April unless they make an offer she can't refuse in the next 2 weeks before notice).

Is that good advice? If her last day is April 6, can I go to exchange.gov on April 7 and sign us up for May 1 with "loss of employer provided insurance" the qualifying event to trigger mid-year enrollment? Or must I wait till May 1 when we have no insurance?

 

[MichaelB]

The search function brings a wealth of ACA enlightment. Just two recent examples

http://www.early-retirement.org/forums/f38/aca-cobra-do-i-have-this-correct-71395.html

http://www.early-retirement.org/forums/f38/need-some-clarification-on-aca-vs-cobra-please-75869.html

Here's a paper from the ACA FAQ which explains everything about the premium credit http://www.fas.org/sgp/crs/misc/R41137.pdf

 

[tmm99]

Thank you, MichaelB. I did read parts of "Need some clarification on ACA..." but it got very confusing. It sounds like though Cobra has a grace period where if you don't use it, you don't need to pay for it and if you do, you can pay retroactively. And the other thread (which I only glanced over) says quitting a job is a qualifying event for ACA, so that is good.

One thing that isn't clear to me is how the ACA premium is determined. Can I use this year's income estimate for the premium calculation (not last year's income)?

 

[tmm99]

Also, ACA is different from state to state, right? So if I move (say from CA to NY), how does it work? I imagine I cannot get my ACA registration in NY until I get my drivers license in NY or something? Am I covered with CA ACA until I sign up with NY ACA even if I have already moved?

Any place I can call to get all these questions answered? (I have a huge learning curve on this...) Thank you very much!

 

[Beldar]

Any place I can call to get all these questions answered? (I have a huge learning curve on this...) Thank you very much!

Hi TMM99...I'm in the same situation as you shortly (July). Follow MichaelB's advise and digest all of the threads regarding ACA, you'll find plenty of examples and answers to your questions there.

Also, go to the ACA website, register, and play around with different scenarios for your location. It's a good way to download all of the particulars for different plans applicable to you and the cost impacts (subsidies) of varying your MAGI. I've found ACA plans are VERY difference in terms of coverage than employer suppllied HC, at least for the lower metal levels.

_B

 

[jim584672]

I know there are tons of threads regarding ACA, but I didn't think I needed to know about it yet, so I wasn't reading them - Just to warn you that I am quite ignorant of how it works, except that the lower the income, the cheaper the premium, sort of thing.

If I quit my j*b next month, is Cobra the only option I have, or I can get on the ACA? If ACA, do they base my premium on my last year's income (that may make my ACA preimum as high as the Cobra) or they will base it on this year's projected income (this year's projected income would be 1/4 of what I made last year.)

You estimate your income for the year. Based on the estimate your subsidy is determined. Cobra can be used for the gap if needed.

 

[MichaelB]

Thank you, MichaelB. I did read parts of "Need some clarification on ACA..." but it got very confusing. It sounds like though Cobra has a grace period where if you don't use it, you don't need to pay for it and if you do, you can pay retroactively. And the other thread (which I only glanced over) says quitting a job is a qualifying event for ACA, so that is good.

It sounds confusing, in part, because some folks want to do that to try to go a couple of months without paying for health care, jumping in to get Cobra retroactively if they do suddenly need it.

You can choose between ACA or Cobra. If you go to your state exchange, you can get quotes for policies you will be eligible for. Compare those with your Cobra option and see which one suits you best. If you choose an ACA policy, you need to apply before the 15th of a month to get coverage beginning the 1st of the following month.

One thing that isn't clear to me is how the ACA premium is determined. Can I use this year's income estimate for the premium calculation (not last year's income)?

The premium is fixed, based on your age and the coverage you choose. You supply your estimated income for 2015, this determines if you are eligible for premium assistance. Then, when filing 2015 taxes in 4/16, you reconcile the assistance you received (if any) with the assistance you earned, and settle the difference.

Here are a couple of threads that discussed income for ACA purposes in some detail.

http://www.early-retirement.org/forums/f28/er-taxable-income-and-aca-magi-72060.html

http://www.early-retirement.org/forums/f38/aca-and-early-retirement-70471.html

 

[sengsational]

It sounds confusing, in part, because some folks want to do that to try to go a couple of months without paying for health care, jumping in to get Cobra retroactively if they do suddenly need it.

You can choose between ACA or Cobra. If you go to your state exchange, you can get quotes for policies you will be eligible for. Compare those with your Cobra option and see which one suits you best. If you choose an ACA policy, you need to apply before the 15th of a month to get coverage beginning the 1st of the following month. http://www.early-retirement.org/forums/f38/aca-and-early-retirement-70471.html

From what I recall from discussions on this board as well as when I did my application on heathcare.gov, they ask you if you qualify for COBRA, and you can say "yes" without impact. But if you actually paid for COBRA and are enrolled in it...if you answer that one "yes", you will not be allowed to purchase on the exchange. At least that was my understanding. Going 'bare' wasn't something I wanted to do to save a few bucks, but it seemed like it was required, based on the rules.

 

[gauss]

You are suppose to notify the Marketplace (ie healthcare.gov in many cases) if your expected income changes during the year or if your tax family (ie you, your spouse and dependents) changes during the year.

That way they can adjust any advance premium tax credit (APTC) aka subsidy that you receive month to month applied towards your premium cost. The premium doesn't change during the year -- only the subsidy and thus your contribution.

Oh, and just for the record, if you are married filing separately you do not qualify for premium tax credits in general.

-gauss

 

[tmm99]

From what I recall from discussions on this board as well as when I did my application on heathcare.gov, they ask you if you qualify for COBRA, and you can say "yes" without impact. But if you actually paid for COBRA and are enrolled in it...if you answer that one "yes", you will not be allowed to purchase on the exchange. At least that was my understanding. Going 'bare' wasn't something I wanted to do to save a few bucks, but it seemed like it was required, based on the rules.

Interesting point!!

 

[tmm99]

Thank you MichaelB for a detailed post.

I may be able to get some discount with ACA although I don't know what my MAGI will be by the time I quit...

More questions..

So if I quit on April 10th, I can apply for ACA and I will be covered from May 1st, right? If I get sick between 4/10 and 5/1, I guess I could activate Cobra and if I did that, I will have to go with Cobra the rest of the way, right?

What if I move to NY on 6/1? Would that be another qualifying event (regardless of who I get the insurance from - ACA or Cobra)? If I was on the CA ACA plan and I move to NY, who covers me until I get on the NY ACA plan?

 

[MBSC]

More questions..

So if I quit on April 10th, I can apply for ACA and I will be covered from May 1st, right? If I get sick between 4/10 and 5/1, I guess I could activate Cobra and if I did that, I will have to go with Cobra the rest of the way, right?

What if I move to NY on 6/1? Would that be another qualifying event (regardless of who I get the insurance from - ACA or Cobra)? If I was on the CA ACA plan and I move to NY, who covers me until I get on the NY ACA plan?

To be covered by an ACA plan on May 1st, you would need to enroll prior to April 15. If you get sick between 4/10-4/30, there are several possiblities.

1. If your employer pays premiums month-to-month you would be covered under your employer's plan for the entire month of April since you were employed there on the first of the month. Please consult your HR dept as this would make things much easier.
2. If the above is not the case and you only have a simple doctor's visit, it may be cheaper to pay that yourself out of pocket.
3. With no employer coverage, you would retroactively activate the COBRA coverage for a major medical event, cancel the ACA plan, and at the next ACA open enrollment period determine if you want to continue COBRA or switch to an ACA plan. The next open enrollment will be Nov-Dec 2015 with an effective date of 1/1/2016.

If you know you will be moving on 6/1 AND you have employer coverage for the entire month of April you have several options for May:

1. Use the retroactive feature of COBRA for the May coverage. That is, do not accept COBRA but do not decline COBRA either. There is a 60 day window to accept COBRA and you can use that to your advantage. Then decide between NY ACA and COBRA enrollment. If you already have OOP expenses they may carry over to the COBRA plan. I have no experience with how moving impacts a COBRA plan.

2. Sign up for a short-term, non-ACA plan. There will be no subsidy available but they're fairly inexpensive. You will not incur an ACA penalty since the non-ACA plan will be in force less than 2 months.

3. Enroll in a CA ACA plan prior to 4/15 with a 5/1 effective date. Enroll in a NY ACA plan after your legal residence has changed. A PPO CA plan will provide some out-of-network coverage.

The picture will be clearer once you determine if your employer's coverage will be for the entire month of April.

 

[2B]

I have found in my case that Cobra is approximately the same price as the bronze PPO ACA compliant plan without subsidy. Cobra is not aged based so someone siginificantly younger than me might be able to get a lower non-subsidized plan. If the OP retires mid-year, any subsidy for 2015 is probably down the proverbial toilet.

Going with Cobra lets you continue meeting whatever deductible you have and you get credit for any spending prior to going on Cobra. With the ACA policy, you would start over.

My deductible with my current plan is $3,000/family and then 80% of the cost are covered until the family has approximately $12k in total OOP. With the ACA, each individual (only two of us) has a deductible and max OOP of nominally $6,000 and zero cost after that. If a serious event occurs to one person, the ACA policy would provide the greater benefit. I plan to keep Cobra for 2015 and compare this with ACA plans for 2016. This is how it shakes out for me so you should look at how your specific plan compares to what's available with the ACA.

 

[EastWest Gal]

My COBRA would have been over 50% more than ACA bronze plan. We rarely go to the doctor--I am one and can legally prescribe to family members in retirement if I maintain a retiree license.

Apply for ACA insurance by the 15th of the month, and PAY your first premium before the end of the month, and you'll be covered. Typically you have health insurance until the end of the month in which you worked your last day.

 

[tmm99]

Thank you very much for all your posts! WOW! I am so lucky to be here among you all!!

Anyway, I have given my notice at work. My last day is at the beginning of April (so I have health care coverage paid by my employer until the end of April!! Thank you!!!)

The rest is still not decided. I will be in CA only for a few weeks after my resignation date, so I could consider not paying Cobra until I move to NY (state). (I checked the premium for NY and it is hard to qualify for subsidiaries (your income has to be pretty low) but even without the discount, the rate for Silver is more than $200 lower than my Cobra ($600). One thing I don't like about it is that they won't cover me to go to doctors outside of NY (unless it's some kind of emergency that they will decide on case-by-case basis if they want to cover me or not.) I will be in Canada more than half of the time after I move from CA to NY.

Hmm...

 

[Fermion]

They changed the page. At https://www.healthcare.gov/coverage-outside-open-enrollment/special-enrollment-period/ it used to say you did not have to apply by the 15th to get coverage starting at the beginning of next month. Here is the section that was on that website a few weeks ago:


Losing other health coverageThis could including losing a job-based plan, aging off a parent’s coverage at 26, losing coverage through divorce, losing eligibility for Medicaid or CHIP, and similar events:

• Coverage can take effect: The first day of the month after you enroll and after the loss of coverage
• Enrollment window: From 60 days before to 60 days after losing your other coverage Important: If you leave your job for any reason and lose your job-based health coverage, you qualify for a Special Enrollment Period. But you don’t get an SEP if you voluntarily drop: a job-based plan without leaving your job; an individual insurance plan; unexpired COBRA coverage; or any plan that doesn’t qualify as minimum essential coverage.

 

[tmm99]

Thank you Fermion. I guess quitting a job is a qualifying event, as well as moving from one state to another.

My question now is...

I live in CA now, but I am moving to NY (state) about a month after I quit my j*b in April, so I could get a NY healthcare without getting into Cobra or CA healthcare, but the problem is, I will be in Canada half time or more than that once I move to NY. What options should I look into for that? (This may not be an ACA question any longer...) Maybe I should start another thread for this, but since all the information is in this thread up to this point, I am asking here...

 

[MBSC]

You may find this E-R post by papadad111 helpful.

http://www.early-retirement.org/forums/f38/insurance-for-the-global-nomad-74606.html#post1544770

 

[papadad111]

Yes. Split time between Canada and USA most likely requires two separate policies. One for ACA in USA and one for Canada.


If bulk of time is in Canada, You could get a Canada health policy and then purchase "travelers insurance" for coverage in USA for short durations when not in Canada. That may be cheaper than 2 policies one being a genuine ACA policy.

you may be hit with an ACA penalty if not having ACA compliant healthcare policy unless can prove Canada presence/residence .

There are policies out there that cover world-wide but they are really very spendy. 15k per year premiums plus deductible

Check out web site brokerfish.com for multi and single country expat health insurance. Any of those with added USA cover get expensive fast.

In our case we plan to snowbird in other countries so for us it's an ACA policy while in USA and then a separate non- ACA global (ex-us) policy when abroad. Going through this real time and will share what I find ...

 

[tmm99]

Yes. Split time between Canada and USA most likely requires two separate policies. One for ACA in USA and one for Canada.


If bulk of time is in Canada, You could get a Canada health policy and then purchase "travelers insurance" for coverage in USA for short durations when not in Canada. That may be cheaper than 2 policies one being a genuine ACA policy.

you may be hit with an ACA penalty if not having ACA compliant healthcare policy unless can prove Canada presence/residence .

There are policies out there that cover world-wide but they are really very spendy. 15k per year premiums plus deductible

Check out web site brokerfish.com for multi and single country expat health insurance. Any of those with added USA cover get expensive fast.

In our case we plan to snowbird in other countries so for us it's an ACA policy while in USA and then a separate non- ACA global (ex-us) policy when abroad. Going through this real time and will share what I find ...

Thank you very much, papadad.

I won't be a resident of Canada for several more months, so I won't be able to get a Canada health policy until then, so it sounds like I will need to carry two policies like you said - one from NY and a traveler's insurance while in Canada. If the sum of the cost of the NY ACA and the traveler's insurance is more than the Cobra, I imagine I should consider going with Cobra? (As far as I know, the current provider which would be my Cobra provider covers any Emergency/Urgent care visits in any country)?

 

[papadad111]

Don't forget to not just consider the cost of premiums but also deductible and copays.

Suspect cobra may be more expensive premium wise vs ACA+travel policy but the oop maximums and the deductibles of cobra could be cheaper if you had high usage of insurance - as the cobra would add / pool all that you spend in all locations together to meet deductible and max oop limits.

I am learning real time here trying to get global-coverage insurance myself.

 

[tmm99]

Don't forget to not just consider the cost of premiums but also deductible and copays.

Suspect cobra may be more expensive premium wise vs ACA+travel policy but the oop maximums and the deductibles of cobra could be cheaper if you had high usage of insurance - as the cobra would add / pool all that you spend in all locations together to meet deductible and max oop limits.

I am learning real time here trying to get global-coverage insurance myself.

You are so right about the deductibles and the copays!

My current insurance is set up differently from other ones and it gives me up front $1000 to spend (which I have spent $100 on so far this year) and after that is spent, I have to pay out of pocket up to $1600 and then it goes to 70/30 or 60/40 (depending upon if the doctor is within the network or not, and the rate is fixed for network providers.) Anyway, out of pocket maximum is $3150 (a little more for Out of Network). My understanding is I can continue on with the same coverage for Cobra and this covers my Dr's visits anywhere in the US plus emergency visits in foreign countries (while the NY insurance will only cover doctors in the area), so it is not such a bad deal, is it, because when I look at the NY plans, the deductible is higher and the out of pocket maximum is twice as much on Silver Plan although the premium is lower by almost $200/mo. I am leaning more and more toward Cobra at this point (since NY one I will have to add a traveler's health insurance on top of it.) although I may pay more up front with Cobra, the maximum out of pocket is lower.

Thank you very much for reminding me these points!