Monthly vs annual income for ACA

[pirsquared]

In the past, I have put all of our income in as "annual" and let healthcare.gov divide by 12 to get a monthly estimate. This is easier for investment income; plus I work a school-year (part-time so no benefits) job so I don't get paid in the summer. I was told that the 2024 Marketplace application specifically asks what you earned in November (or the current month in which you are doing your application) in addition to annual. I am concerned about this because I want to be completely honest on the application but I don't want them to multiply my November income by 12. Any thoughts from anyone who has completed a 2024 application? This is also weird because we are projecting income for 2024 so I don't know why we would need to give a November 2023 amount.

Thanks!

 

[Rianne]

We've been on the ACA from 2014-2022. DH had a consulting business that for a few years had scattered income throughout the year. It was hard to guestimate income. We gave a reasonable estimate of what we thought it would be. Also sent them a letter with a spreadsheet telling them the income was from consulting and this was an estimate.

That's fine. It works itself out at the end of the year and you may get a refund or owe a bit more depending on your actual income. Many people do contract work on the ACA and it's not permanent. Consider construction workers, Uber drivers, and part-time workers who do not get health insurance through their employer. The ACA adjusts to that.

 

[pirsquared]

We've been on the ACA from 2014-2022. DH had a consulting business that for a few years had scattered income throughout the year. It was hard to guestimate income. We gave a reasonable estimate of what we thought it would be. Also sent them a letter with a spreadsheet telling them the income was from consulting and this was an estimate.

That's fine. It works itself out at the end of the year and you may get a refund or owe a bit more depending on your actual income. Many people do contract work on the ACA and it's not permanent. Consider construction workers, Uber drivers, and part-time workers who do not get health insurance through their employer. The ACA adjusts to that.

Thanks! I understand that we can just estimate for variable income. However, I am under the impression that they will ask outright what I earned in November of 2023, which I can tell them exactly. If they use this number instead of my annual estimate for 2024, then it will lower my subsidies a bit. But I guess that's okay as it will all work out in the end when I do 2024 taxes. I am planning on an HSA eligible plan this year so CSRs are not an issue.

 

[COcheesehead]

It’s impossible to be 100% precise. It gets reconciled on your taxes anyway.

 

[Fermion]

I don't think they really want what they are asking, otherwise it would be a hell of a lot of paperwork for them.

Imagine if someone made $4,000 one month, zero the next, $4000, zero, and so on.

They would have to bounce every month from state medicaid to a silver or bronze plan, then back.

I bet it would be 48 hours a year just on the phone with the exchange.

 

[Rianne]

Thanks! I understand that we can just estimate for variable income. However, I am under the impression that they will ask outright what I earned in November of 2023, which I can tell them exactly. If they use this number instead of my annual estimate for 2024, then it will lower my subsidies a bit. But I guess that's okay as it will all work out in the end when I do 2024 taxes. I am planning on an HSA eligible plan this year so CSRs are not an issue.

Right, don't sweat it month to month. BTW, the HSA-eligible Bronze plan saved us lots of $$. The high deductible is somewhat misleading b/c if you're fairly healthy, like us, we paid ~ $8/month premium. The hospital discounts cut the cost quite a bit. I don't think we went over $3K/year in health insurance costs. Plus you can contribute to your HSA and tIRA tax deductible which brings your MAGI down. We're paying close to $7K for Medicare now...NOT complaining! But it goes to show the ACA is great for those without employer healthcare.

 

[aaronc879]

I was on ACA for 7 years and I don't remember them asking for current month income. You just estimate what your income will be for the year. I did contract work where I didn't make a lot of money and the money was highly variable. I may make $6K one month, $3K 3 other months and nothing the other 8 months. I just say I make $15K/yr, monthly income is not important, just annual.

 

[pirsquared]

It’s impossible to be 100% precise. It gets reconciled on your taxes anyway.

Good point. I will just answer all the questions honestly and let it work itself out at tax time.

I don't think they really want what they are asking, otherwise it would be a hell of a lot of paperwork for them.

Imagine if someone made $4,000 one month, zero the next, $4000, zero, and so on.

They would have to bounce every month from state medicaid to a silver or bronze plan, then back.

I bet it would be 48 hours a year just on the phone with the exchange.

Right! I just heard that they were asking for current month as well as projected annual this year and this seemed weird.

Right, don't sweat it month to month. BTW, the HSA-eligible Bronze plan saved us lots of $$. The high deductible is somewhat misleading b/c if you're fairly healthy, like us, we paid ~ $8/month premium. The hospital discounts cut the cost quite a bit. I don't think we went over $3K/year in health insurance costs. Plus you can contribute to your HSA and tIRA tax deductible which brings your MAGI down. We're paying close to $7K for Medicare now...NOT complaining! But it goes to show the ACA is great for those without employer healthcare.

Thanks! Yes, I did the math and I think an HSA-eligible plan will be good for me this year. Two years ago when my husband and daughter were still on the plan also, the silver plan with CSRs was awesome. But after my husband started Medicare and my daughter started a full time job, I have not even reached my low deductible. So I calculated that the HSA plan will be better than the CSRs.

I was on ACA for 7 years and I don't remember them asking for current month income. You just estimate what your income will be for the year. I did contract work where I didn't make a lot of money and the money was highly variable. I may make $6K one month, $3K 3 other months and nothing the other 8 months. I just say I make $15K/yr, monthly income is not important, just annual.

My understanding is that this is a new question this year. My brother did his application already and mentioned it. I should just do my own application already so I know for sure. but I like to have all my ducks in a row before I navigate the application. The Marketplace application kind of stresses me out, even though I love things like math and taxes

 

[aaronc879]

My understanding is that this is a new question this year. My brother did his application already and mentioned it. I should just do my own application already so I know for sure. but I like to have all my ducks in a row before I navigate the application. The Marketplace application kind of stresses me out, even though I love things like math and taxes

That could be true. This year I switched to my state's equivalent to Medicaid since I knew I wasn't going to make enough to qualify for the ACA. I was on ACA for 7 of the last 10 years and don't remember a question about a specific months income but it could be new for this year. Worst case they will ask you to send them proof of income. Just send a letter that says your income is variable or seasonal and you should be fine. Good luck.

 

[Aerides]

When I renewed a few weeks ago, I don't think it asked about November specifically? Either way, I just re-up with the same info and let it even out at tax time. You can start it now and see what it asks you, as perhaps it differs in some states.

 

[jim584672]

They are trying to determine if you should go to Medicaid or not, that is why they ask monthly income. Legally Medicaid is current month income.

 

[Dtail]

I don't remember being asked for my monthly income and the Healthcare exchange processed my application.

 

[aaronc879]

They are trying to determine if you should go to Medicaid or not, that is why they ask monthly income. Legally Medicaid is current month income.

I went onto my states equivalent to Medicaid and they said it was ok if I had a month that was over the poverty level as long as the yearly total was under. They aren't going to make you go onto ACA for one month and then back to Medicaid. That would be crazy. If I go over 50% of poverty level then I have to start paying an $8/mo premium and small co-pay but anything under 100% of poverty level for the year keeps me on the plan. Maybe it varies by state?

 

[jim584672]

I went onto my states equivalent to Medicaid and they said it was ok if I had a month that was over the poverty level as long as the yearly total was under. They aren't going to make you go onto ACA for one month and then back to Medicaid. That would be crazy. If I go over 50% of poverty level then I have to start paying an $8/mo premium and small co-pay but anything under 100% of poverty level for the year keeps me on the plan. Maybe it varies by state?

Each state does things their own way. Some say two months high and you are off. NY does annual recerts, so report high and you stay on until the annual recert date.

 

[GenXguy]

They are trying to determine if you should go to Medicaid or not, that is why they ask monthly income. Legally Medicaid is current month income.

I remember this discussion coming up before, but the reference was to "currently monthly income", not "current month."

https://www.early-retirement.org/forums/f38/when-to-do-aca-sign-up-119090-2.html#post2980587

 

[pirsquared]

They are trying to determine if you should go to Medicaid or not, that is why they ask monthly income. Legally Medicaid is current month income.

Yes, this seems to be the case.

I did my 2024 application today on healthcare.gov and they asked for current month (specifically November 2023) income. Then, on the next page, they asked if our 2024 annual income was expected to be the November 2023 income times twelve. I selected "no" and then they let me put it a single number for expected 2024 income, which is different than how they asked last year. It worked out fine. I have not yet been asked to send in any proof for any year, but I gave them access to our tax returns and so far we have gotten a small amount back each year when reconciling on form 8962. So I guess that is proof that we are estimating accurately.

 

[GenXguy]

Well, this didn't go as expected for me.

It asked for my December income instead of November income. But more importantly, it asked for my estimated 2024 income, which I had calculated in advance.

I'm canceling my COBRA so that it ends at the end of December.

Surprisingly, the marketplace says I'm eligible for a "special" enrollment period, and it says I need to enroll by Feb 29. The only reason it gives me is, "You have a Special Enrollment Period because of a life change."

But my understanding was that by canceling COBRA (with no other changes such as a change in company subsidy or life changes), I had to wait until the open enrollment period. It doesn't matter in my case because it's the open enrollment anyway, and I'm starting coverage through the ACA beginning Jan 1.