Health insurance postwork premedicare

[PaunchyPirate]

Thank you for the information. I'll bring to attention of my tax preparer. Clearly they don't make this information easy to know for someone with unpredictable income. My tax prep guy is a cpa and he's known my situation. It seems that the ACA system is geared to those with pensions and/or predictable income.

I live in Pennsylvania. For 2 years I had to use the federal exchange. Then PA started their own exchange, which I’m now using for the 2nd year. For 3 of those 4 years, my entire income has been from dividend & cap gains distributions and interest. I have no pension. My income has varied over the 4 years. I make a reasonable estimate each year based on the previous year’s values. I’ve never had an issue. One year I estimated mid $40k income. In December of that year, I decided to sell a lot of investments to accomplish something I wanted to do and my income went up to $200k. The only issue was that I had to repay the subsidy that I had been getting all year. This was done at tax time reconciliation. The Next year, I went back to estimating in the mid $40k range. I’ve been within $5k of my estimate in the other 3 years.

 

[meleana]

Silver plan is always a good bet

 

[Emerson11]

Wow, that seems high. We pay about $800 a month for a gold plan for two. Age 59 and 61.

Gosh, I'm paying $891/mo for a bronze high deductible HSA police for myself only. I'm 61. BCBS pays nothing until around $7500 deductible. I'm in excellent health, but I don't think they're allowed to consider that with the new laws. I think they have to charge everyone the same regardless of risk.

 

[TripleLindy]

By the way, I qualify for an ACA subsidy, but because my income is entirely from dividends, cap gains and interest, it's impossible to meet the filing requirements for income proof.

My income is also entirely from the same sources. Your income proof is your tax return. When signing up for the subsidies upon selecting your ACA plan, you only estimate your income. When you file your return, if you underestimated and ended up over the subsidy limit, you pay it back. If you underestimated and are due more, you get a refund. If you estimated correctly, no tax or refund is due.

If you believe that you qualified for subsidies in prior years, it is probably worth re-filing for those years, assuming you can retroactively claim the subsidies. You could have ~$20k per year coming back!

 

[imnontrad]

You did not say how old you are. If you are approaching 65, COBRA is not considered to be
an equivalent healthcare policy. if you decide to use this instead of signing up for Medicare, you will have a premium penalty for life.

 

[gauss]

Thank you for the information. I'll bring to attention of my tax preparer. Clearly they don't make this information easy to know for someone with unpredictable income. My tax prep guy is a cpa and he's known my situation. It seems that the ACA system is geared to those with pensions and/or predictable income.

Check out IRS form 8962 - Premium Tax Credit.

If you purchase an ACA compliant plan on an exchange such as the Federal Marketplace (ie healthcare.gov) or a state specific exchange if your state has created it's own marketplace, then you can use this form to recover your entire subsidy amount at tax filing time.

If you visit the Federal Marketplace (healthcare.gov) and select the "get coverage" button, it will ask you to select your state. Then it will immediately tell you if you can apply on the federal exchange versus using a state exchange (ie states such as California, Kentucky and a few others have built their own exchanges)

You just need to make sure that you purchase an ACA compliant policy that will issue an IRS 1095-A form at tax time so that you can claim your premium tax credit.

Also, this applies to non-catastrophic plans only (ie Gold/Silver or Bronze only).
The catastrophic plans require you to be under age 30 or have a financial or income hardship.
Either way, the catastrophic plans will not qualify you for a subsidy, as a 1095-A will not be issued -- you will pay the full amount in this case.



-gauss

 

[Emerson11]

Thank you! I have been purchasing my insurance directly from BCBS because I didn't think I met the proof of eligibility requirements on the exchange. Next year I'll plan on using form 8962.

 

[jim584672]

If you believe that you qualified for subsidies in prior years, it is probably worth re-filing for those years, assuming you can retroactively claim the subsidies. You could have ~$20k per year coming back!

Unfortunately you need to go through the official Marketplace when you sign up or you get no subsidies, even if you delayed to tax time to get the money.

 

[Out of Steam]

At least as important as copays and out of pocket maximums is the availability of doctors and medical facilities. I understand that can vary a lot between levels of ACA plan.

We have a Blue Cross plan that covers most all local providers, and that is hugely useful.

 

[TripleLindy]

At least as important as copays and out of pocket maximums is the availability of doctors and medical facilities. I understand that can vary a lot between levels of ACA plan.

We have a Blue Cross plan that covers most all local providers, and that is hugely useful.

Yeah, I screwed up this year. I wasn’t aware of the changes in ‘21 and since we always flirted with the subsidy limit and often had to pay it back, I moved from BCBS to Friday Health Plan (sounds fake, I know). BCBS premium was almost 2x the Friday premium and we rarely reach the deductible, so I opted for Friday. Interestingly, Friday has most of our specialist docs, but not our PCP. The bigger issue is that while the specialists are in-network, the hospitals where they have admitting privileges are not. That’s probably how Friday keeps premiums low - you have to find another doc and a lower-tier hospital/surgery center if you need something like knee surgery.

 

[meridiver]

Thank you for the information. I'll bring to attention of my tax preparer. Clearly they don't make this information easy to know for someone with unpredictable income. My tax prep guy is a cpa and he's known my situation. It seems that the ACA system is geared to those with pensions and/or predictable income.

I hate to say this, but you might want to consider finding a CPA who is better informed on the ACA rules. It isn't all that complicated and it makes no difference at all whether you receive monthly income or lump sums, whether you overestimated or underestimated your income during the year, or how much documentation you have. The only hard and fast rule is that you have to buy through the exchanges to be eligible for any subsidies.

In fact due to changes in the subsidies first due to the 2020 Covid Relief act, and now the 2022 Inflation Relief act, many of us that skirt the subsidy line find ourselves having to recalculate at the end of the year regardless of how well we estimated. It's just another thing to deal with on the tax return.