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Old 10-29-2015, 06:31 AM   #1
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Back with another ACA question.

Good morning all. First, I'd like to thank the forum members for the help I was given on my earlier questions.

I am starting to look into 2016 enrollment and have another question. At my income level I get "you may qualify for other cost savings" blah blah.

How or where does this take place? Are the deductibles & co-pays adjusted after enrollment or as they are used each time you have a claim?

I ask because I got the same message when I enrolled for my one month of 2015 coverage but the co-pays and deductibles on the paperwork I received aren't any different than want the play showed online.

After seeing the 2016 rates, I am considering dropping down to a Bronze play but I can't really place a value on the "possible cost sharing" that is only available on the Silver plans.

Any help would be welcomed and thanks again!

Murf
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Old 10-29-2015, 08:23 AM   #2
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I am going to listen in on this as we will be in a similar situation for 2016. We retired in 2015 and have been on a silver plan for a portion of this year. We will get back a few dollars in subsidy on our 2015 tax return but didn't try to get the subsidy from the state exchange...we just paid the full price. I knew our income in 2015 would be well higher than the cutoff for cost sharing.

In a couple of days I need to apply for our 2016 policy and somehow prove that we are near destitute in 2016 so we can get cost sharing on a silver plan. If they think we are unemployed, they are going to want to toss us on medicaid. If they ask for 2014 tax return, they are going to see $260k+ in MAGI. I plan on making our 2016 income to be exactly $23,000 but this is hard to explain to the people working our state exchange.
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Old 10-29-2015, 08:33 AM   #3
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Sounds like they are referring to Silver plan cost sharing reductions with the phrase "you may qualify for other cost savings".
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Old 10-29-2015, 08:49 AM   #4
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Originally Posted by Murf2 View Post
After seeing the 2016 rates, I am considering dropping down to a Bronze play but I can't really place a value on the "possible cost sharing" that is only available on the Silver plans.
Do you know your income fairly exactly for 2016? The choice between bronze and silver is a bit like gambling, but if you are eligible for cost sharing it would be silly to go with bronze. The upside of bronze though is you can contribute to a HSA (with some plans).
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Old 10-29-2015, 09:00 AM   #5
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Here's a link from kaiser explaining the cost sharing reduction. It reduces deductibles/copay/co-ins when selecting silver plans with income below 250% FPL.

Cost-Sharing Subsidies in Federal Marketplace Plans | The Henry J. Kaiser Family Foundation

When you preview the plans your cost is different than if you view plans using a higher income that doesn't qualify for cost sharing reduction.

What you save probably depends of much medical service you use. I use little to none so I stick with the bronze.
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Old 10-29-2015, 09:14 AM   #6
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Originally Posted by Fermion View Post
Do you know your income fairly exactly for 2016? The choice between bronze and silver is a bit like gambling, but if you are eligible for cost sharing it would be silly to go with bronze. The upside of bronze though is you can contribute to a HSA (with some plans).

The other upside with bronze, even if you do not go HSA, is lower premiums...


The premiums for a silver plan that resembles my bronze plan is at least $300 more per month.... that is $3,600 of payments I can make before break even...

So sure, the deductible is cheaper and you might get cost sharing, but that is only if you use the insurance a lot... a couple of Dr. visits and a few prescriptions and the bronze is way ahead... a really bad year and the bronze is worse, but not that much worse... max OOP is $3,700 more for bronze, so really will cost only $100 more if you max out....


I like the odds of a sure $3,600 savings vs a possible $100 loss....
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Old 10-29-2015, 10:09 AM   #7
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Quote:
Originally Posted by Murf2 View Post
How or where does this take place? Are the deductibles & co-pays adjusted after enrollment or as they are used each time you have a claim?

I ask because I got the same message when I enrolled for my one month of 2015 coverage but the co-pays and deductibles on the paperwork I received aren't any different than want the plan showed online.

After seeing the 2016 rates, I am considering dropping down to a Bronze play but I can't really place a value on the "possible cost sharing" that is only available on the Silver plans.
Member Animorph created a spreadsheet for comparing plans.

Link to that E-R post: Bronze, Silver and Coinsurance/Copay

I am glad to see you realize the cost sharing reductions for deductible and OOP max do not apply to Bronze plans. If you do go with the Bronze, make sure the provider network meets your needs. It could have a different network even if it's from your current insurance company.

The reduced deductible and OOP max are shown online when you enter an income within the qualifying range. For example, a Silver family plan may display $3000/$6000 for deductible/OOPM. To see the difference (savings), make note of the Silver plan name, edit your income to a high amount, return to the results, and find the same plan. It will display the un-subsidized cost sharing along the lines of $6000/$12000.
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Old 10-29-2015, 11:55 AM   #8
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We've had Bronze HDHP with an HSA for 2 years. I wanted to stay with our insurer with the same plan but the cost went up by $250/mo and it's no longer HSA eligible so I am shopping for a new plan.

I tend to over analyze things that affect our monthly expenses. If you are trying to compare Bronze plans with Silver plans consider the worst case scenario. That would be your 12 months of premiums plus the maximum out of pocket. Then decide how you feel about taking the lower premium plan vs the risk of 2016 being a year where something major happens and you pay the max out of pocket.

The 12 months of premiums are your guaranteed minimum cost. Anything above that comes from your usage and what the plan provides in terms of copays and coinsurance after the deductible. You are protected by the plan's max out of pocket.

In shopping for what's available to us this year I'm very disappointed in the lack of HSA eligible plans. That worked really well for us in the past. Our lowest cost HSA plan is $300 more a month than we currently pay and that is just not justified by the tax savings.
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Old 10-29-2015, 12:40 PM   #9
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Quote:
Originally Posted by Fermion View Post
I am going to listen in on this as we will be in a similar situation for 2016. We retired in 2015 and have been on a silver plan for a portion of this year. We will get back a few dollars in subsidy on our 2015 tax return but didn't try to get the subsidy from the state exchange...we just paid the full price. I knew our income in 2015 would be well higher than the cutoff for cost sharing.

In a couple of days I need to apply for our 2016 policy and somehow prove that we are near destitute in 2016 so we can get cost sharing on a silver plan. If they think we are unemployed, they are going to want to toss us on medicaid. If they ask for 2014 tax return, they are going to see $260k+ in MAGI. I plan on making our 2016 income to be exactly $23,000 but this is hard to explain to the people working our state exchange.
What you will be asked to do is document why you estimate that you will have so much less income in 2016. You are given something like 90 days to get that info together. This happened to me a year ago using the federal exchange and I was able to do my 2014 income tax return early to show my lower income. As it turns out, my 2015 income will be even lower than estimated so I will get a small tax refund. But my estimated income was low enough to get me the cost sharing benefits.

You will need to provide evidence that you are no longer employed and should also detail income that you'll be living off. They will ask to see bank and brokers' statements and so on if you're expecting to live off cash in the bank, capital gains, interest, dividends, IRA distributions, etc.
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Old 10-29-2015, 12:56 PM   #10
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Thanks to all for the replies and the links! Real helped. I've been running some different income numbers through the estimator. It's a real eye opener. Lower income with a Silver plan really makes a difference.

As for my free bonus question, I will be spending down an after tax account to supplement my wife's income.

Only the capital gains on that count as income, correct? If we stay in the 15% bracket, We will not pay any income tax on capital gains. Is this also correct? OK I went for two bonus questions.

Thanks again, this site is a great help to us inexperienced folks.

Murf
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Old 10-29-2015, 01:28 PM   #11
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capital gains, interest from bonds, even those $500 bonus from signing up for a bank account all count as ACA income.

Conversions of 401k or IRA to Roth also count as ACA income.

Of course W2 wage and pension count.
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Old 10-29-2015, 02:17 PM   #12
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Originally Posted by Ian S View Post
What you will be asked to do is document why you estimate that you will have so much less income in 2016. You are given something like 90 days to get that info together. This happened to me a year ago using the federal exchange and I was able to do my 2014 income tax return early to show my lower income. As it turns out, my 2015 income will be even lower than estimated so I will get a small tax refund. But my estimated income was low enough to get me the cost sharing benefits.

You will need to provide evidence that you are no longer employed and should also detail income that you'll be living off. They will ask to see bank and brokers' statements and so on if you're expecting to live off cash in the bank, capital gains, interest, dividends, IRA distributions, etc.
So, on those statements do you have to show your current balances? In other words, say you have millions but all in a money market accounts (extreme example) is that looked upon as, "Yep, the income isn't too much or too less so you are good for a subsidy".
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Old 10-29-2015, 02:45 PM   #13
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Originally Posted by easysurfer View Post
So, on those statements do you have to show your current balances? In other words, say you have millions but all in a money market accounts (extreme example) is that looked upon as, "Yep, the income isn't too much or too less so you are good for a subsidy".
We ER'd midway through 2014, and what I provided for 2015 to substantiate our income estimate was a simple statement with my own calculations and the following supporting documents:
  • 1099-R for DW's 2014 457(b) deferred income
  • 1099-R for DW's 2014 pension income
  • 1099-R for my 2014 pension income
  • 1099-INT for 2014 interest earnings
  • Final annuity calculation statement for DW's pension, with reference to date of retirement
  • My employer's statement of service history with reference to date of retirement
Agree with your concern about disclosing too much info, as I wasn't about to provide any list of assets or other evidence of NW. For some time after submitting the info above, I was still getting occasional messages saying I needed to provide more info. Finally called to see what else they might require, and was told to ignore that, everything was fine.

Just the other day, when I updated my income info (getting by just fine on less than my original estimate) I noticed there was still a nag message about needing to provide more info. Figure the 2015 1040 will suffice just fine for that purpose, but I did note the questions regarding income seem to be stated differently now. In the end, one still needs to massage the data provided to end up with a MAGI somewhat close to reality. Kind of like needing to tell them what questions to ask so as to be able to provide the answer they want.
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Old 10-29-2015, 03:07 PM   #14
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We ER'd midway through 2014, and what I provided for 2015 to substantiate our income estimate was a simple statement with my own calculations and the following supporting documents:
  • 1099-R for DW's 2014 457(b) deferred income
  • 1099-R for DW's 2014 pension income
  • 1099-R for my 2014 pension income
  • 1099-INT for 2014 interest earnings
  • Final annuity calculation statement for DW's pension, with reference to date of retirement
  • My employer's statement of service history with reference to date of retirement
Agree with your concern about disclosing too much info, as I wasn't about to provide any list of assets or other evidence of NW. For some time after submitting the info above, I was still getting occasional messages saying I needed to provide more info. Finally called to see what else they might require, and was told to ignore that, everything was fine.

Just the other day, when I updated my income info (getting by just fine on less than my original estimate) I noticed there was still a nag message about needing to provide more info. Figure the 2015 1040 will suffice just fine for that purpose, but I did note the questions regarding income seem to be stated differently now. In the end, one still needs to massage the data provided to end up with a MAGI somewhat close to reality. Kind of like needing to tell them what questions to ask so as to be able to provide the answer they want.
Thanks for the detail. Looks like they are only focused only on income.
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Old 10-29-2015, 04:19 PM   #15
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Originally Posted by easysurfer View Post
So, on those statements do you have to show your current balances? In other words, say you have millions but all in a money market accounts (extreme example) is that looked upon as, "Yep, the income isn't too much or too less so you are good for a subsidy".
There is no need to show everything only perhaps accounts from which you expect to receive MAGI. I put together a simple ledger showing the calculation of MAGI which mostly followed the lines on page 1 of form 1040 leading to the AGI value then adding back in any income not included in AGI but needed in the MAGI calculation. I did that for both 2014 and 2015 side by side. I also included copies of recent statements where I thought it would help establish the income numbers and also wrote explanations of why certain income was changing significantly from one year to the next. I also was able to include my 2014 tax return to corroborate the 2014 numbers. For you, documentation from your ex-employer as to last day of work would also be important in showing the change in income.

Of course, they can always ask for more info if they want. Like Theseus, I kept getting notified that they had not received my info but I cleared that up with a phone call. Hopefully, they've a better system in place now.
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