2022 ACA - when to start

[retire48in2018]

I retired in March. Employment agreement is that medical COBRA is paid by employer for months (but it will be 1099 reported as income), and 12 months of payments (through March of 2022). Technically, I am no longer employee according to the documentation and can apply for ACA at any time.

For 2022 - I have 2 options -

Expected 2022 income & capital gains total - $86,000 (plus potentially 1099). Taxes are MFJ

1 - decline the employer paid COBRA 1099 for Jan-Mar and then ACA for entire 2022 year. 1099 COBRA js $1700 per month.
I assume then my ACA is 8.5% of $86k = $7300

2-accept the employee paid COBRA 1099 for Jan-Mar. Then, start ACA in April. Income increased by $1700x3 = $5100, taxable at 12% = $612.
ACA would be 8.5% of $91.1 ($86 + $5.1) = 7743 or $645/month. 9 months = $5805 (Apr - Dec).

So ACA plus added taxes is $6417.

Is that right? Is ACA paid monthly based upon all of Jan-Dec 2022? (Income is $60k, Jan - Mar, then dividends $20k from investments in April and December).

 

[Sarah S]

. Do you have a deductible with the cobra plan? If so consider that when you change plans midyear anything paid before under cobra won’t count for your new plan. Ditto with oop max

 

[retire48in2018]

We are both healthy. But there is the risk of “losing” benefit of deductible payments.

 

[retire48in2018]

Or in option 2, do we have to pay 8.5% of all 2022 income, not just pro-rated 9 months ?

 

[NewEnglander]

The 8.5% is only for the 2nd lowest cost Silver plan. If you choose a Bronze plan your monthly plan costs will be considerably less. In our state a Bronze plan for 86K MFJ is in the range of $50.00 per month. This is a great option especially if you are both healthy.