Multiple ACA policies and a subsidy

[firewhen]

If it makes sense to have a separate policy for our adult dependent DD18 would this have any bearing on the subsidy? Both would still be in my name, and there would be one family policy for DW and I, and an individual policy for DD. Would the subsidy be the same as if we had a single family policy? (Our income is the same and the SLCSP cost is still the same so I am thinking this would be ok. The agent said the subsidy is allocated between the 2 policies but I wanted to double check with all the experts here!)

[PaunchyPirate]

I don’t think I’ve ever heard of a policy like you describe for your daughter. If it’s in your name and she is on it, doesn’t that mean 2 people are covered? I truly have no info to help you, but this seems like it goes against how it works.

[Sue J]

When we used the ACA we always got two individual policies. The subsidy was equally divided between the two of us.

My guess would be that your daughter would get 1/3 of the total subsidy but I don't have any experience with that.

Just in case you don't know how to get people on separate policies, you have to make Groups. Put you and your spouse in one group and then your daughter in another group.

Just curious, is this because you want your daughter to have different coverage than you and your spouse?

[firewhen]

Quote:

Originally Posted by Sue J Just curious, is this because you want your daughter to have different coverage than you and your spouse?

Yes one will be a silver policy and the other bronze because of anticipated spend. I looked at what the agent wrote me and I misspoke a bit. There would be one marketplace account in my name with 2 separate policies. Sounds like this should not upset the subsidy.

[thod]

I have done something similar to this for 2022.

My son will be away at college in another state. The ideal policy was a plan that really only covered stuff (non-emergency) in our state. But since my son was going to be in another state for most of the year that would not work out well for him.

So we split him off from me and my wife via the 'groups' feature on the ACA website. The subsidy split also (2/3 to 1/3 roughly). He now has a plan that has a much larger national coverage than ours.

[SecondCor521]

Having two different policies will not affect the subsidy for a tax family.

What will affect the subsidy are, among other things:

1. Whether you claim your daughter as your dependent. Since you are claiming her, you will have a tax family of the three of you (plus any other dependents you might have), and you'll add the information from both 1095-As together and report that information on your Form 8962 attached to your 1040 next spring.

If you were not to claim her as a dependent, then there are two tax families - you and your spouse and any other children in the first one, and your daughter in the second one. In this scenario, your daughter may not qualify for ACA because her income might be under 100% of FPL for a family size of one. In this case the most likely situation would be for her to sign up for her college plan if she's going to be at college, or her work plan if she's working, or Medicaid if neither of those apply.

2. Her income. If you claim her as a dependent and if she is required to file a tax return, then her AGI will be added to your household income and be reported on Line 2b of Form 8962. (If she is not required to file a return but files a return to, for example, get any withholding refunded to her, then you do not have to report her AGI on your 8962.)

If you do end up claiming her as a dependent, then how the subsidy is divided won't matter, because the math works out the same way if you're adding both policies together on your 8962.

If you're really enthusiastic about tax planning, you might consider evaluating if it's better to try to have her as a tax dependent or a tax independent this year. There are pros and cons both ways, but if you figure out that one way is better than the other, then you can work to make the facts and circumstances be such that you arrive at the answer you would prefer, rather than waiting until the end of the year and discovering that the facts and circumstances have locked you into the less preferred option.

[ncbill]

Are they in school?

The school-based health insurance (gold-level ACA equivalent) plan for our last kid in school is very reasonable.

IIRC, ~$1,600 for a full calendar year of coverage.

[firewhen]

Quote:

Originally Posted by ncbill Are they in school? The school-based health insurance (gold-level ACA equivalent) plan for our last kid in school is very reasonable. IIRC, ~$1,600 for a full calendar year of coverage.

How would this affect any subsidy? Would we still get a 1095A for the school plan?

[SecondCor521]

Quote:

Originally Posted by firewhen How would this affect any subsidy? Would we still get a 1095A for the school plan?

School plans, at least the one I'm aware of that my son has, are not ACA compliant - one rule for ACA plans is that they are sold through the state marketplace, and school plans are not sold that way.

Therefore, they do not issue 1095As, they don't qualify for subsidies, and they are not reported on your 8962.

[ncbill]

Quote:

Originally Posted by SecondCor521 School plans, at least the one I'm aware of that my son has, are not ACA compliant - one rule for ACA plans is that they are sold through the state marketplace, and school plans are not sold that way. Therefore, they do not issue 1095As, they don't qualify for subsidies, and they are not reported on your 8962.

Not an ACA plan, but still creditable coverage.

The plan my kid has specifically states:

"METALLIC LEVEL – GOLD WITH ACTUARIAL VALUE OF 85.830%"

They receive a 1095B for school plans, same as for employer-provided health insurance.