ACA input

[SecondCor521]

Reading sengsational's thread made me want to start one about my specific situation...didn't want to derail the other thread.

I am struggling with how to handle this right now. Sometime in 2016 my oldest child will hopefully/maybe/probably/possibly spread his wings and fly off on his own into an apartment with a friend and become self-sufficient. Depending on when that happens, I will either (a) file as single (my younger two kids are with me less than 50% of the time) and a family size of three, with my oldest being a separate Obamacare family unit, or (b) file as HOH and a family size of four to include my oldest.

I'm in the Class of 2016 and can only make general guesses about my income and my son's income as they relate to FPL. For me I would like to hit 249% FPL and I would like my son to be at 139% FPL, but who knows how things will work out.

My plan is to be on employer's health care through end of February, then COBRA for two months, then ACA starting May 1, so I have some time to figure this out.

Any suggestions on how to best deal with the income / family size uncertainty when enrolling in ACA in April?

 

[jesaco]

Reading sengsational's thread made me want to start one about my specific situation...didn't want to derail the other thread.

My plan is to be on employer's health care through end of February, then COBRA for two months, then ACA starting May 1, so I have some time to figure this out.

Any suggestions on how to best deal with the income / family size uncertainty when enrolling in ACA in April?

I think you can enroll with the ACA only on the enrollment period if you were on COBRA. Leaving COBRA is not considered a qualifying event therefore you have to wait for the next enrollment period. Please correct me if I'm wrong.

 

[SecondCor521]

I have 60 days after my qualifying event to enroll in ACA. My qualifying event is my loss of my employer insurance on 2/29/16, which means I can enroll in ACA any time up until 4/29/16, and coverage starts the first of the next month, i.e., May 1.

At least that's my understanding.

 

[MichaelB]

I have 60 days after my qualifying event to enroll in ACA. My qualifying event is my loss of my employer insurance on 2/29/16, which means I can enroll in ACA any time up until 4/29/16, and coverage starts the first of the next month, i.e., May 1.

At least that's my understanding.

Yes, but once you choose Cobra, the ACA option goes away and you need to wait for the next open enrollment period.

 

[rbmrtn]

If you elect COBRA you can not change outside of open enrollment.

https://www.healthcare.gov/unemployed/cobra-coverage/

 

[MBSC]

I believe OP is not "enrolling" in COBRA but using the retroactive feature built into COBRA.

You have 60 days to respond to your COBRA notification letter. You then have 45 days to make your payments up to that point and coverage is retroactive to the end of your previous coverage. If, in that time period, you don’t have any events that need coverage, then you can just let it go if you don’t want to pay for the coverage (or can’t afford to). If the company doesn’t receive your COBRA payment, then they’ll just not enroll you in coverage. However, if you have an event in the 105 day window (60 days notification and 45 for payment), then you can still be covered.

Reference: COBRA: Tips for Manipulating the System Legally - Admin Secret

 

[sengsational]

I think you need to make a determination if your son will be a dependent on your 2016 taxes. If not a dependent of yours for 2016, his income will be irrelevant, and your family size will not include him. If he is a dependent, you need to add-in his earnings. So if he'll be makin' the big bucks for a decent fraction of the year, you might want to make sure he's not a dependent or you'll not get a PTC.

If you want him to be covered on your ACA policy, no problem because when he gets health coverage through his new employer, you simply (well, nothing on hc.gov is simple), let them know about this life event. You can expect two separate 1095-A forms from your insurance company for the time when you had him and didn't have him. You will take the data from the two 1095-A's and put it on the 8962 with your 2016 taxes (you'll fill out a year and some months from now). The very first field on the 8962 is family size and that will be determined by 6d on the 1040...there are nitpicky rules for how that is determined, if you supplied at least half his costs, lived with you (or was away at college counts as living with you), etc. But whatever that dependent status turns out to be, that will determine family size for purposes of the PTC.

My DD flew the coup in 2014, so the above is what I would guess will happen if your DS flies.

 

[SecondCor521]

@MichaelB and @rbmrtn, thank you, I did not know that. Very helpful!

@MBSC is correct, I plan to use the retroactive signup aspect of COBRA to cover March and April only if something expensive happens. Otherwise I will "go bare".

@sengsational, thanks for the additional comments, you've encapsulated my problem.

I guess what I am asking for is advice for what to do when I sign up for ACA in April when these variables won't be fully known. Is it better to make the mistake of assuming he will be a dependent and then have it turn out that he isn't, or vice versa?

For my oldest specifically, if he is not a dependent, is it OK if he claims 139% of FPL and then ends up below 100% for some reason? What happens in that case? I think he'd have to pay back any APTC (which could be pretty expensive for him), but he couldn't retroactively go on Medicaid...? (I live in a non-expansion state, FWIW.)

 

[sengsational]

The short answer is assume he will be a dependent and then have it turn out that he isn't, as long as you figure you have a chance that you will be providing at least half of his support. If he certainly will be supplying more than half of his own support, then you're not allowed to have him as a dependent.

When you say "claims 139% of FPL", I presume you mean you're exploring the option where he buys his own policy on the exchange, separate from you and your family. His situation would be that he could keep the advanced PTC if his income was low, and he'd get hit with a big tax bill (paying back the APTC) if his income was high.

Here are the reasons to exclude him from your family definition as you buy your ACA policy:

• His income, without a life event, would make the family income too high to get a PTC.
• You clearly will not be providing at least half of his support.

If both of those are not going to happen, then include him as a dependent in your application. IOW, if he's not going to be making much money, he doesn't get a job with health coverage and you're supporting him, all is good to include him.


If he's included, has a life event because he gets a job with health coverage, you inform hc.gov to reduce your family size. All his past income and new job income becomes irrelevant to your situation, and you'll get a new (smaller) PTC at the point of the life event, but that's not a big deal...you'll still be getting a PTC, just one for a smaller family, for the remainder of the year.

 

[SecondCor521]

@sengsational, I was more worried about if he ended up at say, 98% of FPL and had to retroactively pay back a (relative to his income) large APTC.

The other unknown is that if he is is own family unit, he will probably want different coverage. He could go with a low cost catastrophic, whereas I'm bound by my divorce decree and ex-wife to provide better coverage (probably a Silver with CSR) for the two younger ones.

I guess I'm wanting an answer to the unanswerable - I'm just going to have to look at the data in April and then guess.

 

[ziggy29]

My plan is to be on employer's health care through end of February, then COBRA for two months, then ACA starting May 1, so I have some time to figure this out.

Well, here's the thing: you have (if you want to really push it) a 60-day window with COBRA. At the end of February (assuming you resign/retire then and your coverage extends through February 29) you could simply do nothing, and DO NOT EXPRESSLY WAIVE COBRA, and if a major medical event occurs within the next 60 days you could elect COBRA and pay the retroactive premiums and be covered.

BUT -- if this happens, you would be locked into COBRA (and its premiums) until ACA open enrollment for January 2017. If you have no need to elect COBRA, your window to do so simply disappears after 60 days, and you could elect to take a plan on the Marketplace for May 1 (exactly after the 60th day, which is risky). This is risky, though, a little too risky for my blood. That said, if my math is right, you would be "naked" on April 30; your ability to elect COBRA expires on April 29 (60 days after February 29) and ACA coverage would not begin until May 1.

If you elect COBRA right off the bat for March, you are locked into it until January 2017; canceling COBRA mid-year is not a qualifying event (exhausting the 18 months is, but not voluntarily canceling it before then).

If there are no expensive preexisting condition concerns, you could instead buy a catastrophic/short-term plan for March and April and sign up for a Marketplace plan effective May 1 and not be subject to the "uninsured" penalty because ACA allows up to two months without creditable coverage before a penalty is incurred. If you have no major health issues and you don't expect to need much in medical services in March and April, I think this is a better approach.

 

[SecondCor521]

Hmm.

I was hoping to maybe elect but not pay for COBRA; I didn't realize that simply electing COBRA (say, on April 27th) would rule me out for signing up for ACA on April 28th.

I'm tempted to lock my family in the house for two days (April 30/31). We can just eat jello and wear sweats. Maybe we'll survive.

 

[GTFan]

We did the not electing Cobra trick this year to get two 'free' months at beginning of year (I retired at end of 2014), then signed up for a non-exchange policy during open enrollment with policy starting March 1. It was the same policy direct from Humana that we could've gotten on the exchange.

I don't have a real issue with the trick but you have to make sure your spouse understands what to do (i.e. elect Cobra) if something incapacitating happens to you in those two months. And really hope that it doesn't happen to both of you.

If you end up having to elect Cobra for health reasons it's probably worth the short-term cost anyway, it's likely going to be a better policy than what you can buy for the same price.