ACA and Consulting work

[Popeye]

Megacorp is asking me back for a few days. They are changing structures again and need some help with govt contracting. I was the last of the Mohicans. They don’t hire consultants directly but go thru a third party. That third party actually offers health plans for full and even part time work. You can decline it. Does this put my ACA eligibility at risk? I may only work a couple of days a month. So it isn’t likely to be worth the switch. I am asking myself if this is a problem I don’t need in my life.

Anyone been thru this?

 

[daylatedollarshort]

I believe you are correct you would not qualify even if you turn down the insurance - https://www.healthcare.gov/have-job-based-coverage/options/

 

[Popeye]

That’s my fear. I’m waiting to hear back from the 3rd party company about their threshold to get their insurance.

Worst case scenario I have to turn them down and play more golf. I can live with that!

 

[pb4uski]

Are you currently getting ACA subsidies?

 

[Popeye]

Are you currently getting ACA subsidies?

Yes. This income will not push me over the cliff. It really just started as a couple days work to get them pointed in the right direction. They wanted to keep the contract open in case other things come up since the whole process is unbelievably complex. I worked there 28 years and they want drug test and background check done. Even had to send a resume. Lol!

 

[cathy63]

You can still buy a Marketplace plan if you prefer it, but you won't be eligible for a subsidy or premium tax credit if the employer plan for "self-only" coverage would cost less than 9.56% of your household income. If your only income is from working a couple of days per month, then you might fail the affordability test and be eligible for subsidies, but since you're retired and presumably FI, you probably have other income from dividends, cap gains, pension, social sec, etc, and all of that will count in the affordability calculation.

https://www.healthcare.gov/have-job-based-coverage/change-to-marketplace-plan/

 

[joeea]

Megacorp is asking me back for a few days. They are changing structures again and need some help with govt contracting. I was the last of the Mohicans. They don’t hire consultants directly but go thru a third party. That third party actually offers health plans for full and even part time work. You can decline it. Does this put my ACA eligibility at risk? I may only work a couple of days a month. So it isn’t likely to be worth the switch. I am asking myself if this is a problem I don’t need in my life.

Anyone been thru this?

Yes. I went through what appears to be the same situation.

My former employee called and asked if I would consult through their 3rd party that they use for all contractors. I agreed to work 2 days per week, 16 hours. It was actually very enjoyable - no office politics, no administrivia, no overtime, no stress, just the fun parts of the job. If they needed help again, I'd probably do the same.

I didn't need any of their benefits. It didn't put my ACA eligibility at risk.

Any subsidies may be impacted. I'm pretty sure that just depends on your new income level.

 

[CardsFan]

I think I would tell MegaCorp, if they want you back, they can find a way to compensate you without jeopardizing your ACA subsidy. They called you, and the amount of money probably makes no difference to you. Sounds like you are just willing to help them out of a jam.

 

[Popeye]

I think I would tell MegaCorp, if they want you back, they can find a way to compensate you without jeopardizing your ACA subsidy. They called you, and the amount of money probably makes no difference to you. Sounds like you are just willing to help them out of a jam.

That’s it exactly. This defense dept work has been shrinking to zero over the years. It was where I started and I kept my toes in that water all along as I moved thru other positions. So I have a soft spot for it.

 

[USGrant1962]

Is the 3rd party hiring you as a W-2 employee or as a 1099 contractor/consultant? As a 1099 it should be no problem.

 

[Popeye]

Is the 3rd party hiring you as a W-2 employee or as a 1099 contractor/consultant? As a 1099 it should be no problem.

No, it’s W-2. 95% of the time they bring someone in this way for 40 hrs per week and keep them for months at a time. I was hoping for a 1099 solution. I’ll suggest that if it becomes necessary.

I’d even do it for food and a round or two of golf!

 

[pb4uski]

You can still buy a Marketplace plan if you prefer it, but you won't be eligible for a subsidy or premium tax credit if the employer plan for "self-only" coverage would cost less than 9.56% of your household income. If your only income is from working a couple of days per month, then you might fail the affordability test and be eligible for subsidies, but since you're retired and presumably FI, you probably have other income from dividends, cap gains, pension, social sec, etc, and all of that will count in the affordability calculation.

https://www.healthcare.gov/have-job-based-coverage/change-to-marketplace-plan/

Are you single?

I think cathy63 is onto something... if the cost of their health insurance for you is more than 9.63% of your household income then you can decline their health insurance and still be eligible for subsidies.

However, the easiest thing is if the third party or Mega hire you as a consultant and have what pay you on a 1099 rather than W-2. If you go that route you will want to gross up your rate for self-employment tax.

 

[pb4uski]

This is all a great example of why it is ludicrous that we link health insurance and employment in this country.... it makes no sense at all that taking on some part-time work or changing employers should cause people to ahve to jump through hoops with respect to their health insurance. I'm going through this with DS right now... he recently changed jobs from one that had health insurance to a temporary firm that does not so we had to go on the marketplace and get him a subsidized ACA policy.... then if in a few months the place that he is working hires him on we'll need to cancel the ACA policy that he just bought because the company offers health insurance. Stupid way to run a health care system.... part of why Medicare for All or something along those lines doesn't sound like a horrible idea.

 

[Popeye]

Are you single?

I think cathy63 is onto something... if the cost of their health insurance for you is more than 9.63% of your household income then you can decline their health insurance and still be eligible for subsidies.

However, the easiest thing is if the third party or Mega hire you as a consultant and have what pay you on a 1099 rather than W-2. If you go that route you will want to gross up your rate for self-employment tax.

Yes, single. I’ll be generating about half my income via Roth conversion up to the cliff.

 

[pb4uski]

Then your income may be low enough that the third party's premium would exceed 9.64% of your income so you could decline their insurance and your subsidies would be safe. YMMV. Research it and document it well. Wouldn't even hurt to review your conclusion with someone at healthcare.gov to make sure you have interpreted everything correctly and are on solid ground.

 

[Popeye]

Meanwhile I just received an automated reminder email to hurry up and finish my paperwork for them! Lol!

 

[Popeye]

Then your income may be low enough that the third party's premium would exceed 9.64% of your income so you could decline their insurance and your subsidies would be safe. YMMV. Research it and document it well. Wouldn't even hurt to review your conclusion with someone at healthcare.gov to make sure you have interpreted everything correctly and are on solid ground.

I’ll need to press them for the cost. It wasn’t in the online forms / info. It just said you review and select or waive after your first paycheck.

FUBAR

 

[CardsFan]

I’d even do it for food and a round or two of golf!

If the subject wasn't govt contracting, you might actually be able to work out a deal like this. But, I suspect, the subject matter could make that look suspicious to some one who wants to look at it that way.

When I retired, I got a few dozen phone calls over the next year or so. Co-workers asking questions, helping them find something, clarifying an email I wrote two years before. I considered it just helping a friend. The total time involved was less than 5 hours (probably a lot less). That's a case where I could have said "let's talk about it over lunch". Not quite the same as your situation.

 

[Involuntary Retiree]

Yes. I went through what appears to be the same situation.

My former employee called and asked if I would consult through their 3rd party that they use for all contractors. I agreed to work 2 days per week, 16 hours. It was actually very enjoyable - no office politics, no administrivia, no overtime, no stress, just the fun parts of the job. If they needed help again, I'd probably do the same.

I didn't need any of their benefits. It didn't put my ACA eligibility at risk.

Any subsidies may be impacted. I'm pretty sure that just depends on your new income level.

I really like that word! It's so descriptive!

 

[CardsFan]

Then your income may be low enough that the third party's premium would exceed 9.64% of your income so you could decline their insurance and your subsidies would be safe. YMMV. Research it and document it well. Wouldn't even hurt to review your conclusion with someone at healthcare.gov to make sure you have interpreted everything correctly and are on solid ground.

This could be a way out, but unless you intend to make this a long term commitment, with some serious money attached, I would put it back on MegaCorp. "I want to help. Find a way, that does not require me to jump thru hoops for my ACA subsidy". It is NOT your problem. It is THEIR problem!

 

[Popeye]

Looks like I should be ok. To get the upper level healthcare option you need 30 hours per week minimum. I won’t have that. The options available for lesser hours are not ACA compliant so I can just decline and keep my current plan.

Thanks to all.