Obamacare

[youbet]

And, it will be an additional cost for those who do lose the insurance provided by their previous employers. That apparently not a trivial number of cases.

OK, here comes the confusion again......

You're saying that there is likely to be more employers dropping retiree health insurance coverage because of the ACA? Maybe using ACA as an excuse to pull the trigger and drop the coverage? Or because their actual cost of providing retiree health insurance increases when ACA kicks in?

 

[ziggy29]

OK, here comes the confusion again......

You're saying that there is likely to be more employers dropping retiree health insurance coverage because of the ACA? Maybe using ACA as an excuse to pull the trigger and drop the coverage?

I strongly suspect that will be true. And I don't think it will be only retirees dealing with this. I'm pretty sure some employers would decide they'd rather pay the tax and let their employees navigate the exchanges. Time will tell though; for now it's only speculation. We're already seeing employers preparing to drop people down to 29 hours to avoid the mandate.

 

[ERhoosier]

While I completely agree that no one knows how it will all play out, I'm afraid that there are many in this country who do not hope for the best as far as the PPACA is concerned. (I want to emphasize that I am not referring to anyone in this forum.)

Agree many feel ACA is not best way to go, but I hope most feel that folks deserve at least a basic level of care regardless of what bureaucratic mechanism(s) are involved.

 

[youbet]

I strongly suspect that will be true. And I don't think it will be only retirees dealing with this. I'm pretty sure some employers would decide they'd rather pay the tax and let their employees navigate the exchanges. Time will tell though; for now it's only speculation. We're already seeing employers preparing to drop people down to 29 hours to avoid the mandate.

OK, I understand now.

Sorry for all the questions. I should study the ACA in greater detail despite the fact I'm on Medicare and the ACA impact on me is minimal.

 

[Marc]

Agree many feel ACA is not best way to go, but I hope most feel that folks deserve at least a basic level of care regardless of what bureaucratic mechanism(s) are involved.

No, I do not.

Marc

 

[Accidental Retiree]

Advanceable vs. Refundable Tax Credits for PPACA

From the most recent 1040. For 1/1/2014, that means 2012 income.

From Kaiser: http://www.kff.org/healthreform/upload/7962-02.pdf

"How will premium subsidies be provided?

Premium tax credits would be refundable and advanceable. A refundable tax credit is one that is available to a person even if he or she has no tax liability. An advanceable tax credit allows a person to receive assistance at the time that they purchase insurance rather than paying their premium out of pocket and waiting to be reimbursed when filing their annual income tax return."

It seems I've read elsewhere that if you choose to have your subsidy paid directly to the insurer (if you don't have the extra $1000/month or so), your 2012 income will be used as the basis for calculating your subsidy amount.

The other option is you just go ahead and sign up and pay your monthly premiums in 2014, and then when you do your taxes for 2014, you will receive a tax credit based on your 2014 income.

Has anyone else read anything like this?

 

[samclem]

+1. But in fairness to ACA, it appears this trend had started some years ago & some employers may be blaming ACA for what they intended to do anyway.

Budget Report: More Employers Than Previously Estimated Will Drop Health Coverage - Kaiser Health News

The CBO report does indicate about 5 million more people than originally estimated will lose employer-based coverage, but their discussion of the issue implies these are current employees and that the number might not include former employees who will be losing coverage.
I do agree that companies have been paring back on coverage for current and former employees for some time. I don't think there's any doubt that this has accelerated a lot since the ACA. Once the ACA shook up the Etch-a-Sketch regarding what was expected of employers, I think many took the opportunity to cut the obligations they had to former employees. For many employees, this post-retirement medical care package was always part of the compensation they earned during their working years. With the opportunity to shed these costs to taxpayers (via the exchanges and expanded Medicaid eligibility), I'm not surprised companies are doing it. "You're still getting the benefits . . ."

Thanks for the link to that KFF site. Their headlines provide a quick snapshot of how the ACA estimates are changing:

About 7 million people, nearly double the earlier estimates, will no longer get health insurance from their employers because of changes to the tax code made by the health law, according to CBO projections.

. . .


The Fiscal Times: 7 Million Will Lose Employee Coverage Under Obamacare
. . . Overall, 27 million people are expected to gain coverage by 2017, roughly 5 million less than originally projected (Ehley, 2/5).
Bloomberg: Obama's Health-Insurance Expansion Eroding, CBO Projects

National Journal: Budget Office Predicts Rocky Start For Health Care Law
. . . On several important measures of the law's success, CBO's numbers are pessimistic compared with earlier estimates: Fewer uninsured people will get coverage, insurance options will be more limited, and more employers will stop covering their workers (Sanger-Katz, 2/6).
The Hill: Obama Health Law Will Cost $1.3T, CBO Says
The Congressional Budget Office (CBO) estimated Tuesday that President Obama's signature health care law will cost about $1.3 trillion over the next 10 years. The figure represents a slight increase since August, when the nonpartisan budget office estimated that the law would cost about $1.17 trillion before 2022 (Viebeck, 2/5).
NBC News: . . . About 8 million people who would have been insured by their employers will probably lose their coverage because of tax changes, the CBO projects. … But overall, instead of 32 million to 34 million new people getting health insurance by 2017, probably only about 27 million people will be covered by then, the CBO projects (Fox, 2/6).

Health Insurance Exchange update: By the 15 Feb (extended) deadline, 26 states had announced they would not set up a state-sponsored exchange. 18 (incl DC) will sponsor an exchange and another 17 will partner with the Federal Government.

For more info (state-by state):
KFF: State Exchange Profiles Page - Kaiser Health Reform

 

[meierlde]

It should be noted that although my megacorp retains retiree health care, it limits the increases in the company contribution to a 4% rise each year. Thus the risk of increase is on the retiree. Having been retired 8 years the company pays about 40% of the premium, since the retired are in a different pool than active employees. (This does solve the cost shifting problem between retirees and active employees)

 

[ziggy29]

It should be noted that although my megacorp retains retiree health care, it limits the increases in the company contribution to a 4% rise each year. Thus the risk of increase is on the retiree. Having been retired 8 years the company pays about 40% of the premium, since the retired are in a different pool than active employees. (This does solve the cost shifting problem between retirees and active employees)

A lot of employers do that now, even for active employees. My Megacorp started doing that around 2005, where they basically said they will only "eat" cost increases up to (I think) 5% per year and the excess would have to come out of employee paychecks.

I've been on their HDHP/HSA option since they first offered it in 2008, and until last year the costs didn't go up much at all. For 2012, we had to pay about 11% more in premiums, and (worse yet) our deductible increased by $500 (to $3000) and the in-network OOP maximum rose by $2000 (to $6000).

 

[Live And Learn]

Does anyone have an idea how they are going to calculate "income" for the subsidy? .

That are calling it MAGI (Modified Adjusted Gross Income). From what I understand it it AGI plus tax free foreign income. It may also add back tax free muni / treasury interest - I can't really find a clear definition on that one.

 

[ripper1]

That are calling it MAGI (Modified Adjusted Gross Income). From what I understand it it AGI plus tax free foreign income. It may also add back tax free muni / treasury interest - I can't really find a clear definition on that one.

I wish they would have based it on taxable income.

 

[rbmrtn]

That are calling it MAGI (Modified Adjusted Gross Income). From what I understand it it AGI plus tax free foreign income. It may also add back tax free muni / treasury interest - I can't really find a clear definition on that one.

It includes "tax-free" income also

http://www.healthcare.gov/law/full/section/1004-income-definitions.pdf

 

[Live And Learn]

It includes "tax-free" income also

http://www.healthcare.gov/law/full/section/1004-income-definitions.pdf

Thanks for that ! I had a feeling it did.

 

[jollystomper]

Now I'm glad we have a larger than recommended cash cushion... I can see once I retire taking the 3-4% needed from our savings/investments out of that pot instead of or IRA/401K, to keep income under the 400% of poverty level, at least for a few years until things shake out.

While right now my megacorp provides me with health benefits, the cost to them (at least from what is on my W-2 this year) is 6-7 times what the fine would be... so I'm planning for the worst and expecting those benefits to be dropped in 2014 or 2015.

 

[BTravlin]

Any expats here know how Obamacare will affect those who are retired and living in another country? I've been researching this since I will be moving to Mexico soon and can't seem to find clear answers. The law provides for penalties for those who don't buy health insurance but will those penalties apply to those of us living outside the country who elect not to buy a U.S. based health insurance policy? There seem to be provisions for those who are working expats who moved due to employment but not for retirees, at least not that I've found yet. Anybody?

 

[MichaelB]

Any expats here know how Obamacare will affect those who are retired and living in another country? I've been researching this since I will be moving to Mexico soon and can't seem to find clear answers. The law provides for penalties for those who don't buy health insurance but will those penalties apply to those of us living outside the country who elect not to buy a U.S. based health insurance policy? There seem to be provisions for those who are working expats who moved due to employment but not for retirees, at least not that I've found yet. Anybody?

Some posts in this thread may be helpful, beginning here http://www.early-retirement.org/forums/f47/planning-to-be-an-expat-64778.html#post1275717

I live abroad and will try to answer your questions from my perspective.

./.

Once you have established residency abroad you will not be forced to buy USA health insurance under ObamaCare or pay the tax penalty associated with that. Here are the IRS tests for residency abroad (and this is apparently what ObamaCare uses at its guideline -- you must meet at least one of these two criteria):

Foreign Earned Income Exclusion - Bona Fide Residence Test

Foreign Earned Income Exclusion - Physical Presence Test

I plan to file 2012 income taxes from abroad via Turbo Tax using my address abroad as my residence but using my mail forwarding address as my mailing address.

 

[ERhoosier]

Good news for most ER's, though bad news for younger healthy folks. Last week Gov't "finalized" many of its rules on individual HI policy rates. Seems they are holding firm to the 3:1 max rate ratio for premiums, and HI industry group (AHIP) now estimates rate DEcrease of 5-8% for 50-64 yr olds.

U.S. sticks to limits on health insurance charges for older people - Yahoo! Finance

 

[Sue J]

Originally Posted by Katsmeow
As I understand it all these calculators are based upon 2 options - single adult or a family of 4 with 2 adults and 2 children. So, when you put in 2 adults it is really quoting the same that it would quote for a family with 2 children or 3 children for that matter. I think that when the actual numbers come out you will be able to do different family sizes.

I am curious about one thing.

If you put in for a single adult it bases subsidy eligibility based upon being in a one person family. If you put in family it is basing subsidy eligibility upon being in a 4 person family. I'm sure that when actual numbers come out this will be based upon actual family size. That is - if you are a 5 person family then the subsidy will be based upon that while a 2 person family will be based upon 2.

What I haven't seen are what happens in a couple of other situations that I think will be common:

1. Married couple. One spouse is under 65 and one is over 65 so on medicare. The younger spouse can buy insurance for a single person but will the subsidy be based upon a 1 person family or 2 person family? Only 1 person is buying insurance but that younger spouse is in a family with 2 people....

2. Married couple with adult children in college. Does that 20 year old buy an individual policy or does the family buy a family policy? Does this depend on if the adult child is a dependent?

At this point this is mostly academic information for me. DH is on medicare and the kids and I have retiree coverage through his former employer. However, I realize it is possible (maybe even likely) that the employer at some point will drop the retiree coverage.

I have some of the same questions and have been unable to find answers. In Ohio we have a the cleverly named "Office of Health Care Transformation" Current Initiatives

I emailed someone from their list of contacts and have not received a response. I signed up for their email updates and I'll let you know if I ever get any relevant information. My feeling is that a lot of this is being designed as they go along which is hard for those of us that plan ahead and like real numbers.

I'm quoting myself because I finally got an answer back from someone at the Office of Health Transformation in Ohio.

(Sent this question)

I saw your email address in the contacts on the Office of Health Care Transformation website.

I'm trying to find out how the health care exchanges and subsidies will work for a married couple if only one of them needs health insurance.

All the calculators that I've found online give ballpark estimates for the cost of insurance for a single person, a married couple or for a family. Our situation (and for many others) will be that only only one of us will need health insurance through the exchanges, the other one will have coverage. How will the subsidy work if only one of us needs insurance? Will I be able to get insurance just for myself? Would the cost be half of the cost of insurance for a married couple?

Is there a website that explains how this would work?

Thank you,

Sue J.

(The response)

[FONT=&quot]Sue – [/FONT]

[FONT=&quot]Thank you for reaching out to the Office of Health Transformation. I apologize for the delay in getting back to you. [/FONT]

[FONT=&quot]Currently, there is no way to answer your specific question. It will depend on rules that the federal government is developing about the operation of the exchange. You may want to reach out to your US Congressional representative who can help ask these questions to someone at the federal level.[/FONT]

[FONT=&quot]Sorry I do not have more information for you at this time.[/FONT]

Soooooo..... we don't have answers because the answers have not been "developed" yet.

 

[Live And Learn]

While right now my megacorp provides me with health benefits, the cost to them (at least from what is on my W-2 this year) is 6-7 times what the fine would be... so I'm planning for the worst and expecting those benefits to be dropped in 2014 or 2015.

Thats true for nearly everyone. There's got to be a catch otherwise every large company would drop medical coverage and keep the difference as profit.

 

[travelover]

That's true for nearly everyone. There's got to be a catch otherwise every large company would drop medical coverage and keep the difference as profit.

Companies aren't required to provide health insurance now. Why do they?

 

[marko]

From Kaiser: http://www.kff.org/healthreform/upload/7962-02.pdf


The other option is you just go ahead and sign up and pay your monthly premiums in 2014, and then when you do your taxes for 2014, you will receive a tax credit based on your 2014 income.

Has anyone else read anything like this?

That is my understanding too, but many retirees would have to increase their income by about $16K in order to get $12K after taxes to pay the premium up front.

For many, that would increase their MAGI and put them over the 400% limit.

 

[Brett_Cameron]

Just a reminder: The subsidy rules key off multiples of one the two determined federal poverty levels. (not sure which one). the thing to remember in projections and planning is that the federal poverty level changes each year with partial COLA. So for projections after 2014, you will need to estimate what the future poverty level will be and base your subsidy estimates on that.

 

[jollystomper]

Thats true for nearly everyone. There's got to be a catch otherwise every large company would drop medical coverage and keep the difference as profit.

I hope there is... the only "catch" I see is "competitive pressure" - they want to provide more benefits to be more attractive to employees than their competitors. But given the current levels of employment, I doubt that will be a factor.

But it will only take 1 or 2 Megacorps to take the plunge, and then the others will follow... the same trend that has happened with private pensions can well happen with this.

 

[gerrym51]

i think the actual buying of insurance from the exchange will go off without a hitch based on mass. which i am in.

the getting subsidized however will be a quagmire for those that want/need to be subsidized.

 

[gerrym51]

I hope there is... the only "catch" I see is "competitive pressure" - they want to provide more benefits to be more attractive to employees than their competitors. But given the current levels of employment, I doubt that will be a factor.

But it will only take 1 or 2 Megacorps to take the plunge, and then the others will follow... the same trend that has happened with private pensions can well happen with this.

this may sound crazy but this law will encourage companies to dump people off medical coverage.

pay the fines and give the employees a fixed amount to buy coverage-sounds like a winner from a company standpoint and all perfectly legal