ACA guidance

[old medic]

I'm looking getting getting a HDHP with a HSA instead of going on the wife's at work at $500/Mo. Am I correct in that both our incomes are applied, and its figured as AGI. Contributions to her 401K/ and a HSA would reduce our income?

 

[Dtail]

I'm looking getting getting a HDHP with a HSA instead of going on the wife's at work at $500/Mo. Am I correct in that both our incomes are applied, and its figured as AGI. Contributions to her 401K/ and a HSA would reduce our income?

Yes both incomes would apply.
See below for the rules for the formula for the MAGI for ACA purposes.

https://laborcenter.berkeley.edu/wp-content/uploads/2021/03/2021-03-MAGI-Summary.pdf

 

[SecondCor521]

And yes, 401(k) and HSA contributions reduce AGI, which affect ACA premium subsidies and CSRs.

 

[sengsational]

You can pull out last year's tax software, and answer the questions as if you had the HDHP from the ACA. The amount you chunk into the HSA comes right off, on the first few lines of the 1040. Then there's a form that calculates the percentage of federal poverty level. That determines the premium tax credit. The form nets what was paid on your behalf during the year (based on the income estimate in the ACA application) with what actually turned out to be your MAGI.

 

[ivinsfan]

I thought the rule was if one family gets insurance through work that all member need to get insurance through work. IOW you can't split off and get subsidy money too, I know someone who ran into this problem.

 

[SecondCor521]

I thought the rule was if one family gets insurance through work that all member need to get insurance through work. IOW you can't split off and get subsidy money too, I know someone who ran into this problem.

Oh right. If you have other coverage available, you don't qualify for subsidies. OP could still buy an *unsubsidized* ACA policy, but that's probably not an attractive option.

 

[Aerides]

I thought the rule was if one family gets insurance through work that all member need to get insurance through work. IOW you can't split off and get subsidy money too, I know someone who ran into this problem.

Correct, if OP is eligible for spousal coverage on her workplace insurance, he is not eligible for ACA subsidies.

 

[Sue J]

I thought the rule was if one family gets insurance through work that all member need to get insurance through work. IOW you can't split off and get subsidy money too, I know someone who ran into this problem.

There may be an exception for small employers. Is it under 20 employees? Or maybe 50 employees?

We've been beyond ObamaCare for a while, I remember this from early on.

 

[ivinsfan]

There may be an exception for small employers. Is it under 20 employees? Or maybe 50 employees?

We've been beyond ObamaCare for a while, I remember this from early on.

Smaller companies are exempt from having to provide HI, is this what you were thinking about?

 

[Sue J]

Smaller companies are exempt from having to provide HI, is this what you were thinking about?

Not sure. My son worked for a small employer that offered insurance, cheap enough for the employee but full price for the rest of the family. He was concerned that he'd be caught in the "family glitch" with no ACA subsidy for the family.

His HR person told him not to worry, they were a small employer who was not required to report their info to IRS/ACA.

This was a few years ago.

 

[ivinsfan]

Not sure. My son worked for a small employer that offered insurance, cheap enough for the employee but full price for the rest of the family. He was concerned that he'd be caught in the "family glitch" with no ACA subsidy for the family.

His HR person told him not to worry, they were a small employer who was not required to report their info to IRS/ACA.

This was a few years ago.

That makes sense I'd be surprised in the present day if many of those tiny companies continue to offer HI...

 

[old medic]

I thought the rule was if one family gets insurance through work that all member need to get insurance through work. IOW you can't split off and get subsidy money too, I know someone who ran into this problem.

Well that sucks....

 

[sengsational]

I would not accept that just because your spouse could add you, that you can't get a subsidy. That's got to be a complex rule, so I think it would be worth digging into the definitions and find out if it's really applicable in your case.

The sentiment for this position comes from COBRA. What I understand to be true is that just because you could buy COBRA doesn't mean you are covered by COBRA. You are allowed to say "no, I do not have coverage from work". So it would be logical (ehem, laws aren't often logical, but) if your spouse didn't sign you up, then you could say "no", not covered.

 

[ivinsfan]

I would not accept that just because your spouse could add you, that you can't get a subsidy. That's got to be a complex rule, so I think it would be worth digging into the definitions and find out if it's really applicable in your case.

The sentiment for this position comes from COBRA. What I understand to be true is that just because you could buy COBRA doesn't mean you are covered by COBRA. You are allowed to say "no, I do not have coverage from work". So it would be logical (ehem, laws aren't often logical, but) if your spouse didn't sign you up, then you could say "no", not covered.

This has nothing to do with Cobra....the pitfall here is instead of 500 bucks a month you could end up on the hook for the entire ACA policy cost.


You can say a lot of things but that doesn't make them true.

 

[ivinsfan]

Well that sucks....

This isn't a surprise to you as you've heard this exact info in a couple threads you started before. Maybe you think it doesn't make sense, but it's way that decided to do it. If it makes you feel any better 500 isn't a terrible number.



But if your DW ER's with you, you can both get cheap ACA coverage.

 

[Aerides]

I would not accept that just because your spouse could add you, that you can't get a subsidy. That's got to be a complex rule, so I think it would be worth digging into the definitions and find out if it's really applicable in your case.

The sentiment for this position comes from COBRA. What I understand to be true is that just because you could buy COBRA doesn't mean you are covered by COBRA. You are allowed to say "no, I do not have coverage from work". So it would be logical (ehem, laws aren't often logical, but) if your spouse didn't sign you up, then you could say "no", not covered.

I think the language is more along the lines of are you eligible for other coverage... vs. that specific as from your own job/work. But either way the OP will find out when they go to sign up in 11 days.

 

[ncbill]

Not sure. My son worked for a small employer that offered insurance, cheap enough for the employee but full price for the rest of the family. He was concerned that he'd be caught in the "family glitch" with no ACA subsidy for the family.

His HR person told him not to worry, they were a small employer who was not required to report their info to IRS/ACA.

This was a few years ago.

That's where we are...no premium for employee-only coverage, but employee share for family coverage is approaching $1,000/month...were we eligible for subsidies ACA coverage would be under $100/month for all of us.

 

[sengsational]

This has nothing to do with Cobra....the pitfall here is instead of 500 bucks a month you could end up on the hook for the entire ACA policy cost.

I must not have been clear. It isn't COBRA, specifically. It's that if I'm eligible AND sign-up for COBRA then PTC is off the table. If I'm eligible and DON'T sign-up for COBRA then I'm allowed the PTC. Those are the rules. Not trying to make any claims about if spoouse coverage works the same way, but if were me, I'd investigate beyond taking advice in this thread as my only input to the decision.

To the OP, you could research by using the interview in your tax software, digging into the specific definitions of terms in the questions. You may conclude that the PTC is solidly off the table.

 

[ivinsfan]

I must not have been clear. It isn't COBRA, specifically. It's that if I'm eligible AND sign-up for COBRA then PTC is off the table. If I'm eligible and DON'T sign-up for COBRA then I'm allowed the PTC. Those are the rules. Not trying to make any claims about if spoouse coverage works the same way, but if were me, I'd investigate beyond taking advice in this thread as my only input to the decision.

To the OP, you could research by using the interview in your tax software, digging into the specific definitions of terms in the questions. You may conclude that the PTC is solidly off the table.

It can't hurt and might help. The family coverage aspect of ACA can be pretty confusing..

 

[cathy63]

If the employer offers affordable self-only coverage for the employee (where affordable means it costs less than 9.61% of household income in 2022); and they also offer coverage for the spouse at any price, then the spouse cannot get a premium tax credit if he enrolls in an ACA plan.

You can verify this by reading Pub 974. See example 2 on page 13 for this exact case. https://www.irs.gov/pub/irs-pdf/p974.pdf

Or you can look at the IRS flow chart here: https://www.irs.gov/affordable-care...remium-tax-credit-flow-chart-are-you-eligible

 

[old medic]

This isn't a surprise to you as you've heard this exact info in a couple threads you started before. Maybe you think it doesn't make sense, but it's way that decided to do it. If it makes you feel any better 500 isn't a terrible number.

The family coverage aspect of ACA can be pretty confusing..

It sure is... seems every time I get to looking I get more confused...
And it don't take much to get me confu....SQUIRL....

 

[ncbill]

That's where we are...no premium for employee-only coverage, but employee share for family coverage is approaching $1,000/month...were we eligible for subsidies ACA coverage would be under $100/month for all of us.

EDIT: just got the new enrollment material...~$1,500/month for family coverage next year...HDHP.

 

[ShokWaveRider]

ACA seems to be a little late this year on healthcare.gov in providing plan pre-views. They are usually on line about this time.