Qustions on ACA apply process

[Eucerin]

This is my first time using ACA application, I am currently in the middle of the applying process. Confused with the steps. the first 3 steps was about eligibility and I have completed, but instead of going to next step which is Tax and household income, they skipped these and went to item8 which is the citizenship..etc.

Now the screen leads me to buy coverages, there are only 6 choices I have but all over 1,200/month which I consider very expensive. If I click one choice and buy that means I have to pay the $$ stated, Is the Tax and household questions will be coming up later or estimated 2019 income will be later asked??

Is the process Buy first then subsidy later? please let me know the process.

Many thanks for your help.

 

[RunningBum]

You should be asked for income during the initial progress. Those steps should not have been skipped. Maybe you answered some question that made you ineligible for the subsidy. I think there is one where you authorize them to see your tax returns. If you don't allow this, they may not let you take a subsidy up front. Since I've already done mine, I don't think I can go back and see those questions without creating another account, which I'm not going to do.

In the very worst case, you can resolve the subsidy at tax time and get a refund for the subsidized amount when you file. But you shouldn't have to do that.

I'd start over and be careful about answers to all the questions you are asked.

 

[Eucerin]

You should be asked for income during the initial progress. Those steps should not have been skipped. Maybe you answered some question that made you ineligible for the subsidy. I think there is one where you authorize them to see your tax returns. If you don't allow this, they may not let you take a subsidy up front. Since I've already done mine, I don't think I can go back and see those questions without creating another account, which I'm not going to do.

In the very worst case, you can resolve the subsidy at tax time and get a refund for the subsidized amount when you file. But you shouldn't have to do that.

I'd start over and be careful about answers to all the questions you are asked.

Many thanks for your reply.
I have made a call to the administrator. If I don't hear from them in a few days I may find a local broker. From others in the forum, it seems that there are no fees/commissions to be charged for brokers to assisting us.

 

[Rianne]

Brokers are paid by the insurance co. Nothing out of pocket for you. There should be a link to find a broker in your area. My healthcare.gov had a link. Income can be tricky, so you should have experienced help with this.

 

[VanWinkle]

Many thanks for your reply.
I have made a call to the administrator. If I don't hear from them in a few days I may find a local broker. From others in the forum, it seems that there are no fees/commissions to be charged for brokers to assisting us.

An administrator should be able to help you with this problem, or as stated go to a local agent and have them make the call to the administrator. Last year I had a similar problem, but was able to clear it up over the phone with Healthcare administrator,.

 

[Eucerin]

For those of you have replied, I want to say THANK YOU.
I did ended up spoke with administrator and went through all the questions. I have now secured medical insurance for 2019 with subsidy. However I need to provide some information, such as 2018 income, 2019 projected income. 2018 income - I have last two paystubs to show the final income. Is it good enough?
2019 projected income - I have listed monthly dividends, interest and CD from investments, will it be all?
Do I need to provide 2017 Tax return? what page do they need? its a booklet if I print them all.
Many thanks.

 

[VanWinkle]

For those of you have replied, I want to say THANK YOU.
I did ended up spoke with administrator and went through all the questions. I have now secured medical insurance for 2019 with subsidy. However I need to provide some information, such as 2018 income, 2019 projected income. 2018 income - I have last two paystubs to show the final income. Is it good enough?
2019 projected income - I have listed monthly dividends, interest and CD from investments, will it be all?
Do I need to provide 2017 Tax return? what page do they need? its a booklet if I print them all.
Many thanks.

I would take a photo of your last paystub with total income for the year(make sure the total is not including your 401K/IRA contributions) and attach it to the request. You can email that to Heathcare.gov through your own portal. (You could also just ask them what is needed)

For next year, they just need your best estimate of income as that is what your subsidies will be based on. If you earn considerably more, they will ask for some of the subsidies back at tax time for 2019. Read the definition of MAGI Here:
https://www.investopedia.com/terms/m/magi.asp

Best to you,

VW

 

[fatboymike]

You will need to verify your income at some point. I was on an ACA plan this year and had a special open enrollment again in July after my wife died. My only income was capital gains and interest - I made copies of the TAX STATEMENT on my brokerage accounts and submitted along with an explanation of income. It was reviewed by the admin staff and approved for the remainder of the year .

 

[Aerides]

I entered my estimated income which is going to be lower for 2019 than it was for 2017, and I wasn't asked to provide any specific documentation. For both DH and I, I put in estimated monthly income where it asked, and that was all it took to get approved.

 

[fh2000]

I entered my estimated income which is going to be lower for 2019 than it was for 2017, and I wasn't asked to provide any specific documentation. For both DH and I, I put in estimated monthly income where it asked, and that was all it took to get approved.

I apologize for jumping in here. I also have a question for estimated income.

We will both leave our jobs in January 2019 and covered by group insurance. We will sign up for ACA starting February 2019. Our family of 3 projected income will be 120K (bonus, PTO payout, interest), MAGI will be around 70K.

Do I enter 120K as estimated income, or 70K?

 

[RunningBum]

I apologize for jumping in here. I also have a question for estimated income.

We will both leave our jobs in January 2019 and covered by group insurance. We will sign up for ACA starting February 2019. Our family of 3 projected income will be 120K (bonus, PTO payout, interest), MAGI will be around 70K.

Do I enter 120K as estimated income, or 70K?

The estimated income they want is MAGI. I guess you have $50K in IRA, HSA, and other reductions to drop your MAGI down to $70K?

 

[fh2000]

The estimated income they want is MAGI. I guess you have $50K in IRA, HSA, and other reductions to drop your MAGI down to $70K?

That is correct. I have been doing a lot of research lately how to reduce MAGI.

1. With a family of 3, and my adult child filing an independent return, we can contribute 2 family HSA amount ($16000)
2. We will have 3 traditional IRA contribution. ($20000)
3. We will contribute 50% PTO payout to 401K. ($12000)
4. Take ($3000) capital loss
Total of these are around 50K deduction.

We still have a couple of things that might happen:
1. We can take a week or 2 PTO in December to further reduce PTO payout.
2. Our bonus payout may be less than expected. Currently, I use the amount from this year but that was historical high, and company already announced 3rd Q performance was less than projected.

 

[Sue J]

1. With a family of 3, and my adult child filing an independent return, we can contribute 2 family HSA amount ($16000)

How are you coming up with HSA contributions of $16,000?

 

[fh2000]

How are you coming up with HSA contributions of $16,000?

Please double check my analysis, and the amounts.

DW and I file 'Married Filing Jointly'. My adult child files independently.
We plan to sign up with CoveredCalifornia Kaiser BRONZE HSA HMO (BRONZE 60 HDHP HMO) for 3 of us. I assume this will be a family HSA plan since there are more than one individual.

DW and I will have a HSA contribution in 2019: $7000+$2000 catch up = $9000

Per below article, adult child can contribute to $7000 if passed the test:
1. is covered under a High Deductible Health Plan (HDHP)
2. has no other health insurance
3. is not enrolled in Medicare
4. cannot be claimed as a dependent on someone else’s tax return (important)
https://www.hsaedge.com/2016/08/13/...your-family-insurance-can-have-their-own-hsa/

The total we will deduct as a family of 3, is therefore, $16000.

 

[fatboymike]

hmmmm...I'm no CPA but the way I understand it is; husband and wife can make an HSA contribution of: $7000+$1000 (catch up if over 55)

The child can contribute $7000 to their own HSA



Your MAGI is adjusted $8K by your HSA contribution and if the child is independent then the child's MAGI is adjusted by their own $7K contribution on their tax return

 

[SecondCor521]

hmmmm...I'm no CPA but the way I understand it is; husband and wife can make an HSA contribution of: $7000+$1000 (catch up if over 55)

The child can contribute $7000 to their own HSA



Your MAGI is adjusted $8K by your HSA contribution and if the child is independent then the child's MAGI is adjusted by their own $7K contribution on their tax return

I think a similar analysis applies to the traditional IRA contributions mentioned in post #12:

"2. We will have 3 traditional IRA contribution. ($20000)"

I think you can deduct the *two* traditional IRA contributions you make to the parents' IRAs, and the kid can deduct their traditional IRA contribution on their tax return. I would be very surprised if you could deduct a child's IRA contribution on the parents' return, especially if the child is filing their own return, as mentioned.

 

[fh2000]

hmmmm...I'm no CPA but the way I understand it is; husband and wife can make an HSA contribution of: $7000+$1000 (catch up if over 55)

The child can contribute $7000 to their own HSA



Your MAGI is adjusted $8K by your HSA contribution and if the child is independent then the child's MAGI is adjusted by their own $7K contribution on their tax return

Thank you for checking on the total HSA family contribution and total catch up amount.

Per this article, each married couple can contribute $1000 catch up:
https://www.shrm.org/resourcesandto...19-hsa-contribution-limits-rise-irs-says.aspx

"While a married couple under a family HDHP share one family HSA contribution limit, they can contribute up to that shared limit in separate accounts and, if both are age 55 or older, each make a separate $1,000 catch-up contribution to an account in their own name."

So, the total of HSA for us will still be $9000.

 

[fh2000]

I think a similar analysis applies to the traditional IRA contributions mentioned in post #12:

"2. We will have 3 traditional IRA contribution. ($20000)"

I think you can deduct the *two* traditional IRA contributions you make to the parents' IRAs, and the kid can deduct their traditional IRA contribution on their tax return. I would be very surprised if you could deduct a child's IRA contribution on the parents' return, especially if the child is filing their own return, as mentioned.

You are correct. My analysis is to calculate the total MAGI for the purpose of ACA on Form 8962, which includes income from 2 tax returns, total 3 IRA contributions.

 

[Bir48die]

For those of you have replied, I want to say THANK YOU.
I did ended up spoke with administrator and went through all the questions. I have now secured medical insurance for 2019 with subsidy. However I need to provide some information, such as 2018 income, 2019 projected income. 2018 income - I have last two paystubs to show the final income. Is it good enough?
2019 projected income - I have listed monthly dividends, interest and CD from investments, will it be all?
Do I need to provide 2017 Tax return? what page do they need? its a booklet if I print them all.
Many thanks.[/QUOTE

If you have 2018 income then I assume 2019 will be similar. They will just ask you for an estimate. All of this is reconciled at tax time. For those who underestimate their income this is where the penalty comes into play.

 

[sengsational]

I don't think it's a "penalty". I think it's more of a reconciliation (actual vs estimate). If your estimate was lower than actual, then some of the PTC you got every month during the year will need to be returned. If your estimate was higher than actual, then you get a lump sum of the PTC that wasn't awarded during each month when you file. If you "fall off the cliff", it might seem like a huge "penalty", since you have to give back ALL of the PTC that you received every month, but it's not called a penalty...it's just that you no longer qualify for a PTC.

 

[SecondCor521]

You are correct. My analysis is to calculate the total MAGI for the purpose of ACA on Form 8962, which includes income from 2 tax returns, total 3 IRA contributions.

I was under the impression that there was one Form 8962 per tax household which has a 1-to-1 match with tax returns. I know there is a line on Form 8962 for kids' incomes, but I thought that was only when they were little kids, not when they're adults filing their own returns.

What names are you putting at the top of Form 8962? With which tax return are you filing the Form 8962?

I'm certainly not an expert, especially on edge cases. So please take my questions as those of curiosity, not challenge.

ETA: It looks like you can only include your dependent's incomes on your Form 8962 - see instructions for line 2b. It doesn't sound to me like your adult child qualifies as your dependent, especially given your point #4 in post #14 where you're wanting to use the fact that they're not your dependent in order to make the HSA contribution.

 

[fh2000]

I was under the impression that there was one Form 8962 per tax household which has a 1-to-1 match with tax returns. I know there is a line on Form 8962 for kids' incomes, but I thought that was only when they were little kids, not when they're adults filing their own returns.

What names are you putting at the top of Form 8962? With which tax return are you filing the Form 8962?

I'm certainly not an expert, especially on edge cases. So please take my questions as those of curiosity, not challenge.

ETA: It looks like you can only include your dependent's incomes on your Form 8962 - see instructions for line 2b. It doesn't sound to me like your adult child qualifies as your dependent, especially given your point #4 in post #14 where you're wanting to use the fact that they're not your dependent in order to make the HSA contribution.

Thank you for you question and I apologize to OP for the side track.

I have not applied for ACA policy, nor have I filled out Form 8962. I am just doing the analysis preparing for our situation: we are a family of 3 with one tax return for Married Filing Jointly, and one tax return by our adult child as Independent. We plan to purchase an ACA policy to include our adult child who is younger than 26.

According to Healthcare.gov below:
https://www.healthcare.gov/income-and-household-information/household-size/

Who to include in your household: our 'non-dependent child under 26' can sometimes 'Include them only if you want to cover them on your Marketplace plan'.
So, our household size will be 3.

What to include as income: 'The Marketplace counts estimated income of all household members who are required to file a tax return.'
So, our household income will include our income + child's income

According to this article how to fill out Form 8962:
https://accountants-community.intuit.com/articles/1608778-completing-form-8962-premium-tax-credit

Completing Form 8962
Part 1, Lines 1 through 8b:
Most of the lines in Part 1 are calculated automatically from other parts of the return and from the tables found in the Form 8962 instructions. You may need to enter the clients dependent's income on line 2 before completing this form. This is because "Household income" includes the income from all members of the "Tax Family"

Part 2, Lines 9 through 23:
If your client shared a policy with another taxpayer or was married during the year, please review the Table 3 and Table 4 questions in the IRS instructions to determine if additional calculations are needed. The information appearing in lines 11 (annual) or 12 through 23 (monthly), will be entered from Form 1095-A. Note: If more than one Form 1095-A was received for a single state, enter the amount from one for Line 11, Column B.

Part 4, Lines 30 through 34:
Use this section to report shared policy allocations. Review the IRS instructions for more information about how and when to complete this section.

If anyone has actually filled out Form 8962 with similar household situation, please kindly chime in. I am using TurboTax and certainly hope their question/answer section will account for 2 tax return income. I believe on our child's return, Form 8962 will also need to be included.

There is a discussion of shared policy allocations. I plan to put 100% in our tax return, and put 0% in our child's tax return for that.

The law says adult child under 26 can be included in parent's policy. It is how to include and calculate the total income becomes complicated.

 

[SecondCor521]

^ OK, I think you are probably heading in the right direction with the shared policy allocation thing.

One additional comment in that area: There are rules for how you allocate the policy - it isn't up to you to pick. See the instructions for Form 8962 for that part where they give the rules along with several examples.

 

[fh2000]

^ OK, I think you are probably heading in the right direction with the shared policy allocation thing.

One additional comment in that area: There are rules for how you allocate the policy - it isn't up to you to pick. See the instructions for Form 8962 for that part where they give the rules along with several examples.

Thank you for checking on the allocation.

Per this below, it appears that allocation can be flexible:
https://accountants-community.intui...-with-her-but-they-worked-and-made-good-money

"However, in most cases it will save the most money to allocate 100% of the premiums to one tax return (if they all agree to it). It will save the most money to allocate it to the person with the lowest FPL and income. In this case, it sounds like they are all one-family tax returns, so allocating 100% to the lowest income will result in the best Premium Tax Credit.
EDIT: If you allocate 100% to one tax return, the other return (with 0%) still needs to have Form 8962 filled out, with 0% in the allocation field."

 

[MBSC]

Per this below, it appears that allocation can be flexible:
https://accountants-community.intui...-with-her-but-they-worked-and-made-good-money

"However, in most cases it will save the most money to allocate 100% of the premiums to one tax return (if they all agree to it). It will save the most money to allocate it to the person with the lowest FPL and income. In this case, it sounds like they are all one-family tax returns, so allocating 100% to the lowest income will result in the best Premium Tax Credit.
EDIT: If you allocate 100% to one tax return, the other return (with 0%) still needs to have Form 8962 filled out, with 0% in the allocation field."

That information applies when the parents do not inform the Marketplace at the time of plan enrollment that the child is non-dependent. This causes one Form 1095A to be issued creating the need to allocate between tax returns.

When you do inform the Marketplace at the time of plan enrollment that the child is non-dependent, the child receives their own separate 1095A to use on their tax return.

If your parents told the Healthcare Marketplace (usually when they applied for health insurance) that you were not going to be their dependent, you will probably receive a 1095-A of your own, and you will need to enter that into TurboTax.

If your parents did NOT tell the Healthcare Marketplace (usually when they applied for health insurance) that you were not going to be their dependent, you will NOT receive a 1095-A of your own.

You will need to get a copy of your parents' 1095-A and enter it on your tax return. On the screen after entering the 1095-A, you will check the box indicating that the policy was shared by somebody that is not on your tax return. It will then prompt you with further questions to determine how much of it is "allocated" to you (even if it is 0%). Your parents would follow this same procedure.

Source: https://ttlc.intuit.com/questions/2...-parents-health-insurance-and-not-a-dependent