ACA & short-term overlapping coverage with employee coverage

[gwill1010]

My wife and I are retiring on the 2nd of next month.
We are signed up for ACA and coverage starts on the 1st of the month.
My wife's employee coverage ends on the 2nd.
I just found out my coverage ends at the end of the month.

I'll have a month of overlapping coverage. Questions, questions, questions
Is this a big deal?
Is ACA going to find out about this and ding me for a months subsidy?
The ACA help line told me the IRS might find out and ding me for the month. How can they find out
Which insurance should I use if I have to go to the doctor during the overlap?
I'm in a panic.

Thanks.

 

[cathy63]

Don't panic! You will just have to pay back one month's subsidy. There's no penalty if you do it when you file your tax return, just the normal reconciliation that all ACA enrollees do when we file our tax returns.

The IRS will be able to tell that you had overlapping coverage because your employer will issue 1095-B and 1095-C forms and the marketplace will issue a 1095-A and together they will show that you had employer coverage at the same time you had an ACA plan. When you fill out Form 8962, you just need to calculate and enter the correct SLCSP (second lowest cost silver plan) for each month that you had coverage. For that first month, it's going to be whatever it would have cost your wife to get insurance on her own through ACA, which you can look up on your marketplace's website. For subsequent months it will be the number on your 1095-A.

It doesn't matter which insurance you use if you need to see a doctor during that month with the overlap. They're both valid policies and you're allowed to have more than one health insurance policy at a time. They probably won't coordinate benefits though, so you'll end up owing the full co-pay whichever one you use.

 

[gwill1010]

Don't panic! You will just have to pay back one month's subsidy. There's no penalty if you do it when you file your tax return, just the normal reconciliation that all ACA enrollees do when we file our tax returns.

The IRS will be able to tell that you had overlapping coverage because your employer will issue 1095-B and 1095-C forms and the marketplace will issue a 1095-A and together they will show that you had employer coverage at the same time you had an ACA plan. When you fill out Form 8962, you just need to calculate and enter the correct SLCSP (second lowest cost silver plan) for each month that you had coverage. For that first month, it's going to be whatever it would have cost your wife to get insurance on her own through ACA, which you can look up on your marketplace's website. For subsequent months it will be the number on your 1095-A.

It doesn't matter which insurance you use if you need to see a doctor during that month with the overlap. They're both valid policies and you're allowed to have more than one health insurance policy at a time. They probably won't coordinate benefits though, so you'll end up owing the full co-pay whichever one you use.

Great explanation.

I should have quit on the 30th instead of the last day of the pay period.

 

[groesbeck]

This is something I stress about as well - the switch from one to the other and what unknown issues there could be. My megacorp insurance stops the week I quit and I dont intend to do COBRA because of the expense. I know there's a slight delay in starting a ACA policy depending on dates and I just haven't worked out a firm timeline.

 

[RetiredAndLovingIt]

Don't panic! You will just have to pay back one month's subsidy. There's no penalty if you do it when you file your tax return, just the normal reconciliation that all ACA enrollees do when we file our tax returns.

The IRS will be able to tell that you had overlapping coverage because your employer will issue 1095-B and 1095-C forms and the marketplace will issue a 1095-A and together they will show that you had employer coverage at the same time you had an ACA plan. When you fill out Form 8962, you just need to calculate and enter the correct SLCSP (second lowest cost silver plan) for each month that you had coverage. For that first month, it's going to be whatever it would have cost your wife to get insurance on her own through ACA, which you can look up on your marketplace's website. For subsequent months it will be the number on your 1095-A.

It doesn't matter which insurance you use if you need to see a doctor during that month with the overlap. They're both valid policies and you're allowed to have more than one health insurance policy at a time. They probably won't coordinate benefits though, so you'll end up owing the full co-pay whichever one you use.

I'm probably wrong but couldn't he just have asked them and still can right now to delay the start of only his coverage till the following month or do they need a certain amount of advance notification?

 

[cathy63]

I'm probably wrong but couldn't he just have asked them and still can right now to delay the start of only his coverage till the following month or do they need a certain amount of advance notification?

I think it depends on the marketplace. In CA, there would be one policy for the month that only the wife is covered and a second policy for the rest of the year. I don't know how much lead time they need, but "next month" starts tomorrow, so it's worth making a phone call now.