ACA Income Minimums

[RockyMtn]

If I understand the ACA rules correctly one must have a minimum income level in order to qualify for subsidies and cost sharing. In 2018 for a single person that amount is $12,140. If you fall below that level you'll get thrown into the Medicaid depending on your state's rules.

Here is the predicament for my GF. She is 62, will be 63 next year. She has been retired for a number of years and using ACA as her insurance by converting traditional IRA to Roth to reach the income levels for subsidies and cost sharing. She is now down to about $10k in TIRA to convert next year.

What is the amount they will look at for next year to determine her eligibility? Is it her actual 2018 income or her projected income for 2019? If it is her 2018 income then when we get to 2020 and her income is below the minimum (as she is out of TIRA to convert to Roth) can we just say she is going to make above the minimum by getting a job or claiming Social Security for that one year as she turns 65 in 2021 and will be on Medicare? If she doesn't ultimately hit the minimum income levels do you have to pay the cost sharing and subsidies back?

I guess worse case is she just signs up for ACA and we pay full boat for a plan without cost sharing and subsidies.

[jim584672]

As long as they accept your estimate of over 100% FPL ($12,140) (in a non expansion state) then you are good, even if your actual comes in under the line. Estimate under 100% and fall into the gap.

Expansion states the line is 138% FPL ($16,753).

[Free To Canoe]

It sounds like you have thought the problem through pretty well.
They will want her projected income in 2018 December for 2019 (2019 income).
Assuming you can make the $12,140 in 2019, you will have 2020 and 2021 to worry about. The plan about saying she is claiming SS sounds pretty good for the last year.

2020 options: SS, full boat or J*b.

[RockyMtn]

Quote:

Originally Posted by jim584672 Expansion states the line is 138% FPL ($16,753).

Forgot about the expansion to 138% of FPL. We are in one of those states.

[ivinsfan]

Well she has used the rules to her advantage for a number of years . If she falls below the number she can think about Medicaid or just pay the going rate if she doesn't want Medicaid. She could get some part time work.

I don't know if you mingle your household income but your GF is going to be surprised at the cost of Medicare combined with a decent supplement and drug coverage.

[bobandsherry]

I'm sure your friend has considered many things and is probably going to look for part time work next year to help supplement her income during the holidays for 3k. At least that's what she can plan to do. What happens in reality may find she is unable to secure that part time job.

[RockyMtn]

Quote:

Originally Posted by bobandsherry I'm sure your friend has considered many things and is probably going to look for part time work next year to help supplement her income during the holidays for 3k. At least that's what she can plan to do. What happens in reality may find she is unable to secure that part time job.

oh she will look very hard to find some sort of part time income to get to that 138% of FPL threshold. But if she doesn't somehow get hired I assume she won't have to pay back any premium subsidies or cost sharing benefits.

[SecondCor521]

Quote:

Originally Posted by RockyMtn ...I assume she won't have to pay back any premium subsidies or cost sharing benefits.

If she's single, she'll have to pay back the premium subsidies to the extent that she was not entitled to them. Assuming she has income under 200% of the FPL and files single, her repayment will be limited to $300. See the instructions for Part III of Form 8962.

[RockyMtn]

Quote:

Originally Posted by SecondCor521 If she's single, she'll have to pay back the premium subsidies to the extent that she was not entitled to them. Assuming she has income under 200% of the FPL and files single, her repayment will be limited to $300. See the instructions for Part III of Form 8962.

In this case we are talking about not even hitting the 138% of FPL. I can't imagine she would even have to repay $300.

[MBSC]

Quote:

Originally Posted by SecondCor521 If she's single, she'll have to pay back the premium subsidies to the extent that she was not entitled to them. Assuming she has income under 200% of the FPL and files single, her repayment will be limited to $300. See the instructions for Part III of Form 8962.

Those instructions are for when the actual income is higher than the initial estimate. The OP is asking about actual income ending up lower than 100%/138% FPL. The instructions for Line 6 of Form 8962 apply in this case.

There is no repayment. Cost sharing is not reconciled at tax filing. She will keep the premium subsidy and may find she is due a small amount of additional premium subsidy.

Quote:

Originally Posted by wmc1000 We are in the same scenario coming in just slightly lower than estimates income for 2017 and there will not be an issue at tax time. In fact we got an extra $55 PTC credit even though "technically" the income level would have been below the threshold for ACA qualification.

[SecondCor521]

Quote:

Originally Posted by MBSC Those instructions are for when the actual income is higher than the initial estimate. The OP is asking about actual income ending up lower than 100%/138% FPL. The instructions for Line 6 of Form 8962 apply in this case. There is no repayment. Cost sharing is not reconciled at tax filing. She will keep the premium subsidy and may find she is due a small amount of additional premium subsidy.

Duh. Right.

I agree she would keep the premium subsidy received and not have to repay cost sharing.

I would be surprised if she were due an additional premium subsidy if she is below the 100%/138% FPL - I thought in that scenario one didn't qualify for any ACA credit. But that scenario isn't mine and I don't feel like researching the point, so I'll defer.

[jim584672]

There is no premium to reconcile in Medicaid since Medicaid is not insurance, it is coverage.

I am curious why the OP is so opposed to it since it is far better coverage wise than an ACA metal plan.

[MBSC]

Quote:

Originally Posted by SecondCor521 I would be surprised if she were due an additional premium subsidy if she is below the 100%/138% FPL - I thought in that scenario one didn't qualify for any ACA credit.

A person does not qualify for ACA credits when the income estimate is below the threshold. That is no longer a factor once the person is approved for APTC.

IRS Form 8962, Line 6: When actual MAGI is under 100% FPL and APTC was received, answer "no" to the question "Did you enter 401% FPL on line 5?" and continue to line 7. Also answer "no" if actual MAGI is between 100%-400% FPL.

Line 7: As illustrated in Table 2, everyone below 133% FPL pays the same percentage toward the SLCSP. Since the subsidy below 133% FPL is more than the subsidy at 138%+ FPL, she is due the difference when the subsidized premium is greater than $0.

[ivinsfan]

Quote:

Originally Posted by jim584672 There is no premium to reconcile in Medicaid since Medicaid is not insurance, it is coverage. I am curious why the OP is so opposed to it since it is far better coverage wise than an ACA metal plan.

Mind explaining that comment...

[jim584672]

Quote:

Originally Posted by ivinsfan Mind explaining that comment...

Medicaid is not insurance, no premium tax credits are involved since PTC go to insurance companies, as a result there is nothing to reconcile at the end of the year.

As far as coverage goes nothing beats Medicaid as far as cost, it is like a super Platinum plan.

[ivinsfan]

Quote:

Originally Posted by jim584672 Medicaid is not insurance, no premium tax credits are involved since PTC go to insurance companies, as a result there is nothing to reconcile at the end of the year. As far as coverage goes nothing beats Medicaid as far as cost, it is like a super Platinum plan.

Are you on Medicad? super Platinum huh?

[jim584672]

I have been on it for almost 4 years. Much better than my Megacorp plan was, with the same doctors.

[MichaelB]

Medicaid is a Federal program but implementation is up to each State, so it is quite different around the country. In some counties it has an accessible provider network, while elsewhere it's funding is less than adequate for the enrolled population, resulting in more restricted access.

[GTFan]

Quote:

Originally Posted by jim584672 There is no premium to reconcile in Medicaid since Medicaid is not insurance, it is coverage. I am curious why the OP is so opposed to it since it is far better coverage wise than an ACA metal plan.

If you can find Dr's that take it, sure. That's the big problem here and in many other states because they don't pay enough. Most people try to avoid Medicaid around here because even the ACA has better networks.