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07-10-2018, 10:34 AM
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#1
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Recycles dryer sheets
Join Date: Feb 2018
Posts: 133
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COBRA question
My megacorp insurance formally ends July 31 so I have a decision to make. The company will subsidize 50% for the first 6 months then goes to 100% for the remaining year.
Full premium is $1660 / mo. Excellent insurance. Medical,dental,vision,prescription, hearing aids, etc,etc,
My main question is can I go the first 6 months @ 50% then jump to ACA? It appears I will be over the ACA “cliff” this year and likely over in 2019 as well.
I ran a ACA scenario on healthsherpa.com and a silver plan runs $1396 for H & W. (No subsidy)
My FIRE budget for healthcare is $1900/mo including meds,copays,etc.
Hard to know what the ACA premiums will be for 2019 with all the stuff floating around in the news.
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07-10-2018, 10:43 AM
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#2
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Moderator
Join Date: Nov 2015
Posts: 13,922
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Short answer is yes. You can dump COBRA and swap to ACA during the eoy enrollment period. So you can take it now, then decide in November if you want to continue full cobra in 2019 or jump to ACA in January for all of 2019.
It's a no brainer to take it now, since any deductibles won't carry over if you swapped mid-year. I stayed with cobra for the same reasons you mentioned, and also I don't have to worry about finding new providers till it runs out.
edited to correct prior mis-statement.
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07-10-2018, 10:47 AM
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#3
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Recycles dryer sheets
Join Date: Feb 2018
Posts: 145
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Congratulations on your recent ER!!
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07-10-2018, 11:20 AM
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#4
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Thinks s/he gets paid by the post
Join Date: Mar 2013
Location: Coronado
Posts: 3,706
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You can switch from COBRA to ACA under any one of these conditions:
1) ACA open enrollment
2) COBRA ends
3) COBRA costs change because the employer contribution stops
So your switchover dates would be January 1, 2019 for open enrollment; February 1, 2019 for the cost increase; January 1, 2020 for the next open enrollment; February 1, 2020 for end of COBRA eligibility.
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07-10-2018, 02:17 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Jul 2009
Location: The Beautiful Blue Ridge Mountains
Posts: 2,791
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Quote:
Originally Posted by Aerides
Short answer is yes. You can dump COBRA and swap to ACA at any time as you become eligible once you no longer have insurance.
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Incorrect. You can only “dump” COBRA during ACA marketplace open enrollment. However, you can start an ACA policy when COBRA expires even if it’s not during open enrollment.
https://www.healthcare.gov/unemployed/cobra-coverage/
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07-10-2018, 02:23 PM
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#6
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Moderator
Join Date: Nov 2015
Posts: 13,922
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Thanks for clarifying. I was under the impression I could drop cobra voluntarily and go ACA outside of enrollment based on research from 2 years ago but I guess I was wrong!
But, OP can take Cobra now, and then decide during enrollment if he wants to keep it for 2019 or swap to ACA. (I will edit my above post).
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07-10-2018, 02:31 PM
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#7
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Thinks s/he gets paid by the post
Join Date: Dec 2014
Location: St. Charles
Posts: 3,919
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Quote:
Originally Posted by Conundrum
My megacorp insurance formally ends July 31 so I have a decision to make. The company will subsidize 50% for the first 6 months then goes to 100% for the remaining year.
Full premium is $1660 / mo. Excellent insurance. Medical,dental,vision,prescription, hearing aids, etc,etc,
My main question is can I go the first 6 months @ 50% then jump to ACA? It appears I will be over the ACA “cliff” this year and likely over in 2019 as well.
I ran a ACA scenario on healthsherpa.com and a silver plan runs $1396 for H & W. (No subsidy)
My FIRE budget for healthcare is $1900/mo including meds,copays,etc.
Hard to know what the ACA premiums will be for 2019 with all the stuff floating around in the news.
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I would carefully consider keeping the COBRA for the full duration. At the very least, compare the deductibles and max OOP, and consider the benefits of the dental, vision, hearing which you will likely lose with an ACA plan.
__________________
If your not living on the edge, you're taking up too much space.
Never slow down, never grow old!
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07-10-2018, 02:43 PM
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#8
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Recycles dryer sheets
Join Date: Feb 2018
Posts: 145
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Hypothetically using the example above, if the MAGI for 2018 was 150K and the 2019 is estimated to be $40K, would ACA calculate rates /subsidies based on 2018 or 2019 MAGI when enrolling for 2019?
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07-10-2018, 02:58 PM
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#9
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Moderator Emeritus
Join Date: Sep 2007
Posts: 17,774
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Quote:
Originally Posted by CardsFan
I would carefully consider keeping the COBRA for the full duration. At the very least, compare the deductibles and max OOP, and consider the benefits of the dental, vision, hearing which you will likely lose with an ACA plan.
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And I believe once you move off COBRA you cannot go back to it. I was able to stay on it through DH’s megacorp as a retiree’s spouse until Medicare. Even though ACA came into existence then, we decided the extra cost balanced the uncertainty for us.
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
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07-11-2018, 12:25 PM
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#10
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Recycles dryer sheets
Join Date: Mar 2010
Posts: 129
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This presents me something I hadn't considered. I will be retiring completely in October and planned to COBRA through the end of 2018 then consider options for 2019. I never thought about not being able to go off COBRA whenever I felt like it so I need to make that decision during open enrollment. I know I won't be getting any subsidy. Hmm, better revise my thinking.
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07-11-2018, 01:29 PM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2018
Location: Tampa
Posts: 11,298
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Quote:
Originally Posted by Lukeee
Hypothetically using the example above, if the MAGI for 2018 was 150K and the 2019 is estimated to be $40K, would ACA calculate rates /subsidies based on 2018 or 2019 MAGI when enrolling for 2019?
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2019 for sure, but you will probably have to show some documentation on how you arrive at your estimates.
__________________
TGIM
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07-11-2018, 01:53 PM
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#12
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Thinks s/he gets paid by the post
Join Date: May 2014
Posts: 1,390
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I never did Cobra. It was very expensive. I went with the ACA. I am hoping to at some point get on my old companies retiree health plan. I'm still researching when/if I will be eligible and if it will be worth it to switch. It may/may not be worth it.
__________________
Understanding both the power of compound interest and the difficulty of getting it is the heart and soul of understanding a lot of things. Charlie Munger
The first rule of compounding: Never interupt it unnecessarily. Charlie Munger
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07-12-2018, 08:44 AM
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#13
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Thinks s/he gets paid by the post
Join Date: Apr 2013
Location: Ormond Beach
Posts: 1,407
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Same here, got unsubsidized ACA back in 2015 (was a LOT cheaper then) instead of COBRA because ACA Bronze plan was cheaper than unsubsidized COBRA. Then switched to heavily subsidized Silver ACA plan in 2016 until now, plan on doing same for 2019. This is harder for a new ER to do now because unsubsidized ACA plans are stupid expensive here.
My Megacorp retiree plan is also unsubsidized and therefore expensive, it will only be used as a fallback if the ACA implodes. It's quite a bit cheaper than an unsubsidized ACA Bronze plan now.
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07-12-2018, 08:54 AM
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#14
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Full time employment: Posting here.
Join Date: Sep 2016
Posts: 527
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Quote:
Originally Posted by Dtail
2019 for sure, but you will probably have to show some documentation on how you arrive at your estimates.
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Can you skip jumping through their hoops and just true it up at tax time? In other words pay full freight during the year and collect subsidy as a refund when you do you taxes the following April? Assuming you stay on the right side of the cliff?
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07-12-2018, 08:56 AM
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#15
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Thinks s/he gets paid by the post
Join Date: Oct 2010
Posts: 1,225
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I never used COBRA, signed up for ACA since it was a lot cheaper, and we don't use a lot of medical services. The difference in premium cost was enough to cover the out of pocket max of my ACA plan.
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07-12-2018, 09:06 AM
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#16
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gone traveling
Join Date: Mar 2015
Posts: 3,508
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Quote:
Originally Posted by Popeye
Can you skip jumping through their hoops and just true it up at tax time? In other words pay full freight during the year and collect subsidy as a refund when you do you taxes the following April? Assuming you stay on the right side of the cliff?
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That is certainly doable.
Of course that equates to giving them an interest-free loan.
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07-12-2018, 09:07 AM
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#17
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gone traveling
Join Date: Mar 2015
Posts: 3,508
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Quote:
Originally Posted by Conundrum
My megacorp insurance formally ends July 31 so I have a decision to make. The company will subsidize 50% for the first 6 months then goes to 100% for the remaining year.
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That's rather generous!
The only times I have used COBRA, I paid 102% immediately.
The most recent time I used COBRA as a bridge to the ACA open enrollment date. Once in the new year, our ACA plan was significantly cheaper than COBRA (even cheaper than what I paid as an employee) due to subsidies and had a much lower deductible for the same coverage.
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07-12-2018, 09:13 AM
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#18
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2018
Location: Tampa
Posts: 11,298
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Quote:
Originally Posted by joeea
That is certainly doable.
Of course that equates to giving them an interest-free loan.
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+1
Many people do it this way if don't know specifically how much their MAGI will be.
I decide my MAGI for the next year at ACA enrollment time, since it is only related to withdrawing from my TIRA.
__________________
TGIM
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07-12-2018, 09:31 AM
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#19
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Full time employment: Posting here.
Join Date: Sep 2016
Posts: 527
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Quote:
Originally Posted by Dtail
+1
Many people do it this way if don't know specifically how much their MAGI will be.
I decide my MAGI for the next year at ACA enrollment time, since it is only related to withdrawing from my TIRA.
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If I do go ACA for 2019, I will stay off the cliff but I can’t imagine how I would demonstrate what MAGI will be. It will mostly come from Roth conversions or capital gains during the year.
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07-12-2018, 10:03 AM
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#20
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2018
Location: Tampa
Posts: 11,298
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Quote:
Originally Posted by joeea
That is certainly doable.
Of course that equates to giving them an interest-free loan.
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Quote:
Originally Posted by Popeye
If I do go ACA for 2019, I will stay off the cliff but I can’t imagine how I would demonstrate what MAGI will be. It will mostly come from Roth conversions or capital gains during the year.
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I have been on ACA for 2 years now. In 2017, I withdrew from my 401k early in Jan and showed the proof. In 2018, I did do a Roth conversion again in early 2018 and showed the proof.
Each year they wanted the proof by late Feb/early Mar. Unfortunately I don't have the experience of how one would prove capital gains upfront (as one can't).
Possibly, you should speak to a supervisor in Healthcare.gov for some advice.
They do respond to questions all year long and you can't be the first example of a capital gains MAGI source.
__________________
TGIM
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