HSA and Mortgage Interest no longer considered on ACA?

[Yarnstormer]

I’ve been using a bronze hdhp HSA plan on marketplace for several years. Great when nothing happens, ok when something does (broke my ankle this year w surgery etc so I actually hit my $7k oop)
I’m in Georgia. Every year the cost goes up by about $250/mo
I just logged into healthcare website to start my application and it appears that expenses like HSA contributions, mortgage ins and property tax are no longer considered? Is this correct? It’s killing me even with anticipated lower income in 2021

Ugh I don’t want to have to do the math to figure out if an HSA plan is still a good idea at my low tax bracket.

 

[RunningBum]

What do you mean "are no longer considered?" Are you talking about in MAGI, for a subsidy? Pretty sure mortgage insurance and property tax were never considered. I haven't heard about any change to not consider HSA contributions. I don't know exactly how they ask about MAGI, they may rely on you to know what all counts and what doesn't. You're not going to get a good answer unless you ask a clear question.

 

[PaunchyPirate]

I’ve been using a bronze hdhp HSA plan on marketplace for several years. Great when nothing happens, ok when something does (broke my ankle this year w surgery etc so I actually hit my $7k oop)
I’m in Georgia. Every year the cost goes up by about $250/mo
I just logged into healthcare website to start my application and it appears that expenses like HSA contributions, mortgage ins and property tax are no longer considered? Is this correct? It’s killing me even with anticipated lower income in 2021

Ugh I don’t want to have to do the math to figure out if an HSA plan is still a good idea at my low tax bracket.

Nothing has changed in recent years regarding how to calculate your modified adjusted gross income, which is used to calculate any tax credit you may be due. It’s the same as it has been. Is that what you are referring to?

With that said, I believe HSA contributions still are used. But I don’t believe mortgage interest or property taxes ever were deducted from income in the ACA subsidy calculations. Those are tax deductions at tax filing time, but do not help with the ACA.

 

[toddm]

See the healthcare.gov website for valid deductions.

https://www.healthcare.gov/reporting-deductions/

 

[Yarnstormer]

What do you mean "are no longer considered?" Are you talking about in MAGI, for a subsidy? Pretty sure mortgage insurance and property tax were never considered. I haven't heard about any change to not consider HSA contributions. I don't know exactly how they ask about MAGI, they may rely on you to know what all counts and what doesn't. You're not going to get a good answer unless you ask a clear question.

In the past, there were places where you could enter those items and it even autopopulated my application with last years numbers, but it put it all under ira contributions. Now it has ira contributions but there is not longer a section for entering hsa, mort ins and property tax. Maybe it’s a glitch. The site was very buggy.

 

[Yarnstormer]

With that said, I believe HSA contributions still are used. But I don’t believe mortgage interest or property taxes ever were deducted from income in the ACA subsidy calculations. Those are tax deductions at tax filing time, but do not help with the ACA.

I went thru the entire application again on my phone just to see if it was different. There is still no place to put in a HSA contribution (unless it should be entered where the IRA contributions are and it’s an error.
I’ll call and see what’s up.
My income is dropping quite a bit next year - but I don’t see how that could affect the application process.

 

[gauss]

ACA MAGI is based on an ACA-specific modification to AGI (adjusted gross income).

AGI includes 'adjustments' (subtractions) such as deductible HSA contributions.

To my knowledge there has been no change about HSA contributions being taken into account for ACA MAGI calculations.

Mortgage insurance and Property tax deduction are Schedule A deductions (if you don't take the Standard Deduction). AGI is calculated before Schedule A or Standard Deduction are subtracted.

It follows that AGI and thus ACA Premium Tax Credits were never based on Mortgage Insurance or Property Taxes.

Your state ACA marketplace /ACA application only calculates the advanced premium credits that are applied to your policy premiums. At the end of the year when you file your taxes, you are required to file IRS form 8962 to reconcile any advanced premium tax credits awarded by the marketplace to the actual IRS definitions. 8962 is thus the gold-standard for calculating ACA subsidies. As part of this process you will either pay the difference if your subsidy, calculated by your state Marketplace, was too high or receive a refundable tax credit if you subsidy was too low.

-gauss
IRS Certified Tax Prep volunteer and site ACA 'expert'

 

[gauss]

I went thru the entire application again on my phone just to see if it was different. There is still no place to put in a HSA contribution (unless it should be entered where the IRA contributions are and it’s an error.
I’ll call and see what’s up.
My income is dropping quite a bit next year - but I don’t see how that could affect the application process.

Did the application ask for AGI aka adjusted gross income? If so, then the HSA deduction would already be included in this number.

 

[RunningBum]

Did the application ask for AGI aka adjusted gross income? If so, then the HSA deduction would already be included in this number.

That's what I remember always giving, but I didn't know if there are some state variations on the forms. But since the OP is also talking about mtg ins and prop taxes, I think they must be confusing this app with some other form, like their tax program maybe.

 

[SecondCor521]

But since the OP is also talking about mtg ins and prop taxes, I think they must be confusing this app with some other form, like their tax program maybe.

Good thought. In my state, the things the OP mentions would be required for applying for what's commonly called a "circuit breaker" program, where low income seniors can get a break on their property taxes by providing that information on an application to that program. There could easily be people who are both on the ACA and recipients of the circuit breaker.

 

[Yarnstormer]

Did the application ask for AGI aka adjusted gross income? If so, then the HSA deduction would already be included in this number.

The last couple of years it asked for gross income then it had options to add deductions like hsa, ira, property taxes etc.
I assume they were trying to arrive at an adjusted income. I dont know if it was to calculate the magi or maybe it was for medicaid since I have a child and they automatically apply for that regardless of income.
I’ll check again and see if they are asking for just my adjusted income this year and I’m supposed to back the hsa out.
I dont get why there would be a place for ira contributions and not hsa tho.
I’m in Georgia btw.

 

[Yarnstormer]

That's what I remember always giving, but I didn't know if there are some state variations on the forms. But since the OP is also talking about mtg ins and prop taxes, I think they must be confusing this app with some other form, like their tax program maybe.

Literally when I started my 2021 application it was already populated with last year’s info including mortgage int, hsa, ira, and prop taxes.

 

[Yarnstormer]

UPDATE! I called customer service. She went thru my application and agreed that the mystical HSA contribution box was not there but that it should be. Then she put me on hold and we were promptly disconnected of course. I'm too tired to mess with it more today I'll give it a few days and see if it pops up. Or maybe they will fix it and let me know.
Since they have changed their entire form, I need to go figure my net self employment pandemic income anyway lol that should be cheering!
1/2 of 2020? less? more? I draw for commercial development ie stores/shopping centers basically so yeah business is slow. When the recovery happens I'll be hoppin tho.

 

[Yarnstormer]

It’s down to the wire here - the 14th of December. I finally had a marketplace representative call me, she was not sure so she researched and called me back. She said that the HSA contribution is NO LONGER CONSIDERED in the calculation for income! I did of course point out that the website says it IS but she said that it was wrong. It was removed from the application but not from the website.

Just spoke with my accountant and she informed me that the HSA deduction has been removed and will NOT be considered when calculating subsidies. At least for now, 2021 will be an interesting year.

 

[ivinsfan]

It doesn't matter to me one way or another but to some here this will be a big deal and pretty costly.

Your information seems solid.

Could this be specific to your state?

 

[flintnational]

I am also in Georgia. I only entered estimated Magi. I could not find an article indicating HSA contributions are no longer deductible. Is it possible 1)You are not using the healthcare.gov site? 2) You are eligible for a different program other than standard ACA subsidies?

 

[cathy63]

It’s down to the wire here - the 14th of December. I finally had a marketplace representative call me, she was not sure so she researched and called me back. She said that the HSA contribution is NO LONGER CONSIDERED in the calculation for income! I did of course point out that the website says it IS but she said that it was wrong. It was removed from the application but not from the website.

Just spoke with my accountant and she informed me that the HSA deduction has been removed and will NOT be considered when calculating subsidies. At least for now, 2021 will be an interesting year.

I believe your accountant is incorrect. It doesn't really matter in the end though. You will just have to pay the higher premiums throughout 2021 and then when you do your taxes in 2022, you'll get a big refund. If you had a silver plan and were hoping to get cost sharing in addition to the advance premium tax credit then this would be a bigger issue.

 

[cathy63]

I am also in Georgia. I only entered estimated Magi. I could not find an article indicating HSA contributions are no longer deductible. Is it possible 1)You are not using the healthcare.gov site? 2) You are eligible for a different program other than standard ACA subsidies?

Yes, if the screen just asks for MAGI, then you are supposed to take your gross income and add/subtract all your adjustments before entering the final number. If you make an HSA contribution that's an adjustment (not a deduction), and you subtract it from your income. It sounds like in previous years the income screen might have provided more entry blanks and done some of the math for you.