For the recently retired how do you resolve ACA wage inconsistency, big drop in MAGI

[grasshopper]

Not sure how to make a PDF of these documents, though. Maybe FedEx/Kinko's can do that from printed docs?

Most print screens also allow you to save the page as a pdf file.

 

[bingybear]

I expect I will just pay the whole bill and settle up at the end of the year. I expect I will not be at a level that will have cost sharing on the deductible, but may have discounted premium.

You may want to be careful about having too little income as you may fall off the bottom and have to go on medicaid. Not sure how this works out when you get an ACA plan and find out at the end of the year that you did not qualify for it.

 

[scrabbler1]

Thanks to some unexpectedly large cap gain and dividend distributions this month, I will barely clear the $45,960 max for a single person to qualify for a subsidy. I have a unrealized capital loss I can realize by selling some stock fund shares at a loss. Then again, maybe I should save that for next year in case I really need it!

 

[Jackanory]

I did receive a letter at the beginning of the year requesting documentation of my income level, but never received a follow up. Right now I'm doing my tax return with a whole lot of guesstimations, so I can calculate the amount of my roth conversion, to keep me just above the Medicaid threshold. Oddly enough, the amount I've calculated is almost exactly equal to my federal refund (haven't had one of those in many year!)


I have a new letter in hand asking me to document my income. I suppose, once the TaxCut updates are in hand, I can send my freshly minted 1099 within that 90 days window ... or ignore it just like this year!

 

[GTFan]

You may want to be careful about having too little income as you may fall off the bottom and have to go on medicaid. Not sure how this works out when you get an ACA plan and find out at the end of the year that you did not qualify for it.

There's plenty of ways to add more income without docs. Selling on fleabay, craigslist etc. comes to mind immediately. The IRS isn't going to care about returns with padded income.

But yeah, avoiding Medicaid in many (if not most) states is something you definitely want to do.

 

[Nunthewiser]

Just a couple of hours ago, I got to this point. I told the Marketplace that I was retired and my income would consist of only my pension of $36K based on a written estimate I have from Megacorp. I have until 17 March to submit the proof to the Marketplace . By then, Megacorp should have kindly deposited my first (of hopefully many) monthly stipends into my credit union account (supposed to happen 1 March, but you know Megacorps can goof), so I wonder if I should just wait until I actually get the real evidence or just use the estimate I have?

Also, the notice I got vaguely told me to mail it in ( without telling me to associate my username or case number or anything) or upload it once I was logged into my account. Well, I am logged in and I will be damned if I see anything like an upload button or a way to securely communicate. No wonder responses get lost...

Anyone remember how to upload an income projection response to the marketplace?

 

[Tandemlovers]

We had to upload a document attesting to having gotten a 457b distribution,
and a pension document for 2014.

As I recall, I was given a notice in my message box asking for supporting documents.
I used a drop down menu provided to specify the type of supporting document I
was scanning and uploading. I received notice about 48 hours later that they had
approved the documents and that I was cleared to purchase insurance.


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[Nunthewiser]

An, never mind, I found it. Had to go back in an look at my application. Then view application details and there is where it is looking for an upload. Not very intuitive, but better than my aborted attempt last year when it came to a screeching halt after I had uploaded...and I waited...and waited... and waited... and gave up. At least I can go ahead and sounds like I can get all the way through without their approval (until March)

 

[EastWest Gal]

In past years we made 250k+, and now in 2015, we are retired and plan about a 60k income. We put together a PDF document with a cover page that was essentially a written letter about our retirement and a summary of the 6 sources of income that we expected next year. We then created a page for each source. Some were screenshots of the mandatory distribution page in the retirement account, some were actual pages of the prior year's tax return, etc. The summary page labelled everything 1 thru 6 and each of the subsequent pages was numbered 1 - 6, so the reviewer could x-ref it back.

We just got our subsidy approval letter in the mail yesterday, so it was accepted!


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Thank you for this info. I will be applying January for ACA insurance to start in February.


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[soupcxan]

Only the government could require something as ridiculous as "proof" of income for a year that hasn't even started yet...

 

[M Paquette]

Only the government could require something as ridiculous as "proof" of income for a year that hasn't even started yet...

Only if you want an advance on a tax credit that you wouldn't otherwise get until you file next year's tax returns in 2016.

The premium support people may get is based on their income. The premium support is prepayment of a tax credit. The amount of premium support is the tax credit from the year's income, prepaid in 12 monthly increments. The exchange asks for estimated income to estimate eligibility and amount of any premium support the applicant may be eligible for.

If one wants an advance on tax credits, one must provide an advance on their income estimate with documentation or an explanation to substantiate the estimate.

It is actually not very complicated. Of course, it is in the interest of some people to make it appear as complex as possible. This may be used to sell books, services, and of course, TV commercials.

 

[photoguy]

We just had our income verified by Covered California. Basically as others have suggested, we wrote a short letter stating our situation (change in employment) and broke down our estimated income for 2015 (1099 dividends, withdrawals from retirement accounts). For 1099 income, we also included tax statements for previous years providing support for the amount we claimed. For retirement withdrawals, we simply stated the amount we planned to take (actually roth conversions) but provided no supporting documents.

On covered CA we uploaded our letter as an "affadavit".

 

[NoMoreJob]

In the ene it likely won't make a difference how well your income is documented since it will all come out in the wash at tax filing time. If you've underpaid you will pay the difference and if you've overpaid you will receive a reduction in the tax you owe.

What does make a difference is qualifying for Medicaid or qualifying for cost sharing on a Marketplace policy. These situations are where documentation may be critical.

 

[MBSC]

In the end it likely won't make a difference how well your income is documented since it will all come out in the wash at tax filing time. If you've underpaid you will pay the difference and if you've overpaid you will receive a reduction in the tax you owe.

If the premium subsidy received is higher than it should have been, there are caps on the repayment amount for those between 100%-400% of the Federal Poverty Level (FPL).

https://news.leavitt.com/wp-content/uploads/2014/11/11-24-14-Cap-on-Subsidy-Repayment.pdf

Those who received a premium subsidy based on estimated income do not need to repay if their actual income falls below 100% FPL.

Consumers Whose Income Drops Below Poverty Get Break On Subsidy Payback | Kaiser Health News

 

[rbmrtn]

Actually received a letter from them yesterday stating they received and reviewed the documents I uploaded. The documentation was acceptable and no further action was needed.

Painless mostly other than making a PDF of some tax documents.

 

[Fermion]

If the premium subsidy received is higher than it should have been, there are caps on the repayment amount for those between 100%-400% of the Federal Poverty Level (FPL).

https://news.leavitt.com/wp-content/uploads/2014/11/11-24-14-Cap-on-Subsidy-Repayment.pdf

Those who received a premium subsidy based on estimated income do not need to repay if their actual income falls below 100% FPL.

Consumers Whose Income Drops Below Poverty Get Break On Subsidy Payback | Kaiser Health News

How many times can you "estimate" your income will be above 100% FPL and miss before they start denying you subsidies and forcing you onto Medicaid? Can you just re-estimate each year on the assumption the market will do better?

 

[John Galt III]

If the premium subsidy received is higher than it should have been, there are caps on the repayment amount for those between 100%-400% of the Federal Poverty Level (FPL).

https://news.leavitt.com/wp-content/uploads/2014/11/11-24-14-Cap-on-Subsidy-Repayment.pdf

Those who received a premium subsidy based on estimated income do not need to repay if their actual income falls below 100% FPL.

Consumers Whose Income Drops Below Poverty Get Break On Subsidy Payback | Kaiser Health News

Thanks for finding and posting that article! I couldn't find anything about it.

 

[25ring]

I,m in the same boat.I retired last year in May. I receive a subsidy from the ACA.This year they want proof of income for 2015.If I do a Roth conversion to meet the income requirements for the year, will the statement from my financial institution fulfill the proof requirement the gov.needs? Thanks.Mike.

 

[MRG]

I,m in the same boat.I retired last year in May. I receive a subsidy from the ACA.This year they want proof of income for 2015.If I do a Roth conversion to meet the income requirements for the year, will the statement from my financial institution fulfill the proof requirement the gov.needs? Thanks.Mike.

I think so. I just spent 20 minutes with a healthcare.gov representative trying to figure out what I need to send in for proof of my '15 income. A statement would seem to be something they accepted.

I have to give you a YMMV as most of the conversation was me asking the rep what her last statement was.

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[25ring]

Thanks MRG! I know what you mean.I was one of those that had a policy with CoOpportunity.I had to reapply for ins with another company since CoOp went belly up.The people at Healthcare.gov didn't know anything about it! I had to inform the person that the policy wasn't even offered on their own website anymore.I was hopeing to wait until the end of the year to create income,but I guess I'll have to do it now if I want the monthly subsidy instead of reconciling at the end of the year.Mike.

 

[John Galt III]

Thanks MRG! I know what you mean.I was one of those that had a policy with CoOpportunity.I had to reapply for ins with another company since CoOp went belly up.The people at Healthcare.gov didn't know anything about it! I had to inform the person that the policy wasn't even offered on their own website anymore.I was hopeing to wait until the end of the year to create income,but I guess I'll have to do it now if I want the monthly subsidy instead of reconciling at the end of the year.Mike.

I applied online at the ACA website in December 2014 and they sent me a message asking for proof of income for 2015, due by March, 2015. But they went ahead and granted me my subsidy based on my estimate for 2015, even before I sent them any proof for 2015 income. I chose not to call them since that seems to just foul everything up. Much cleaner and neater just doing it all online yourself, and hoping for the best. I plan on doing a Roth conversion near the end of 2015 for the added income I need to qualify for ACA and avoid Medicaid. (But I just saw in another thread that I really won't have to do the Roth conversion since there apparently are no repercussions if one's income is less that he estimated!)

 

[bingybear]

I'm going to be picking up ACA insurance, but am handling this by postponing the subsidy. I really do not have a great way to estimate and support the estimated income... or would consider the delta from last your too great (both of us retiring early this year @ 53). So, I'll pay the full rate and get the credit at the end of the year... if we qualify. Next year should be much more verifiable.

 

[25ring]

John,My premium for Jan has been paid and the one for Feb with the new ins has been set up.The letter I received from HHS says I have 60days to submit proof of income for 2015. Last year I worked 4mos before retireing ,so income proof wasn't a problem.This year I have to create it from my tax deferred account,so I guess whether I do a Roth conversion now or later isn't really a big deal. I just want to be able to get the subsidy and cost sharing every month.Mike.

 

[MRG]

John,My premium for Jan has been paid and the one for Feb with the new ins has been set up.The letter I received from HHS says I have 60days to submit proof of income for 2015. Last year I worked 4mos before retireing ,so income proof wasn't a problem.This year I have to create it from my tax deferred account,so I guess whether I do a Roth conversion now or later isn't really a big deal. I just want to be able to get the subsidy and cost sharing every month.Mike.

Sounds like exact same letter I received. Last year I just clicked a box saying our income had changed. No other documentation was asked for. I retired half way into '13. So my estimate for 14 was substantially less.

This year they're starting to ask you for documentation with the threat of taking away subsidiary. I asked about cost sharing as well, but the rep told me she didn't know what cost sharing was. Good luck.

I'm sure just like last year this forum will lead all of us to the best possible solutions.

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[25ring]

MRG, I'm going to contact my CPA tomorrow and maybe the Healthcare.gov people and see what they say. This stuff is new to pretty much everybody and we're on uncharted ground. I just want to say that this forum has been extremely helpful to me in navigating this healthcare quagmire and comforting as well.Thanks to all of the folks that contribute to this forum!--Mike.