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Hypothetical Health Care *ACA* Question
Old 07-08-2015, 08:04 PM   #1
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Hypothetical Health Care *ACA* Question

John Doe is single & chooses ER @ age 59.5
He has to purchase his own healthcare insurance.
He has a pension of $3,000.00 per month.

His lifestyle requires around $4,000.00 per month, so he takes a distribution of $1,000.00 per month from his ROTH 401-k/IRA.

Since it's a ROTH, he will not have to pay taxes on the 12-k

Will the ROTH IRA/401-k income be counted according to the ACA (Affordable Care Act) when he's shopping for insurance & checking if he's eligible for any subsidies ?

If memory serves, the cut-off for a single person is around 45k
(a single person making 45-k or more per year isn't eligible for any subs)

Thanks in advance!
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Old 07-08-2015, 08:42 PM   #2
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My understanding is that Roth distributions do not count as income for the purposes of ACA subsidies. Probably John Doe should check with his tax guy just to be sure.
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Old 07-08-2015, 09:27 PM   #3
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Will the ROTH IRA/401-k income be counted according to the ACA (Affordable Care Act) when he's shopping for insurance & checking if he's eligible for any subsidies ?
The Roth withdrawal doesn't figure into the MAGI calculation for ACA. See here for a confirmation from KFF. A Reader Asks: Would An IRA Withdrawal Count As Income For Exchange Subsidies? | Kaiser Health News
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Old 07-08-2015, 10:40 PM   #4
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...Will the ROTH IRA/401-k income be counted according to the ACA (Affordable Care Act) when he's shopping for insurance & checking if he's eligible for any subsidies ?...
No.
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Old 07-12-2015, 01:11 PM   #5
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Thanks for the replies
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Old 07-13-2015, 04:00 AM   #6
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The Roth withdrawal doesn't figure into the MAGI calculation for ACA. See here for a confirmation from KFF. A Reader Asks: Would An IRA Withdrawal Count As Income For Exchange Subsidies? | Kaiser Health News

+1.

Subsidies are based on MAGI and multipliers of the feder poverty levels , (so subsidy is income not net worth based )

understanding what goes into MAGI then becomes critical.
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