How does ACA or Covered California work?

[gayl]

I get health insurace with my pension but S just applied for Covered California which I guess works like ACA (sliding scale based on projected 2021 income). What happens if you guess wrong? He knows what it is now but will go up once school is back FT. What happens if you underestimate income? He's supposed to get a $5 hr raise once school goes to in-person learning but he estimated according to his current income.

 

[PaunchyPirate]

I get health insurace with my pension but S just applied for Covered California which I guess works like ACA (sliding scale based on projected 2021 income). What happens if you guess wrong? He knows what it is now but will go up once school is back FT. What happens if you underestimate income? He's supposed to get a $5 hr raise once school goes to in-person learning but he estimated according to his current income.

When he files his taxes for 2021, his actual income will be used to determine how much of an ACA subsidy he actually qualified for. If he got too much subsidy, he will have to pay back the extra with his taxes. Or it will reduce his refund if he was due for one. If he earns less than he estimated, he will get the difference refunded to him.

He can adjust his estimate as the year progresses, which will adjust his premium subsidy. This should make for less of a surprise at tax time.

The above assumes that coveredCA works like the federal exchange, which I’m pretty sure it does. This is a core construct of the ACA.

 

[gayl]

Thank you. I was a little concerned (although as a 23yo it's really up to him) when Kaiser turned out to be free using 2020 income and just $1 a month using 2021 income, still seems low

 

[Asabino]

Stock portfolio factored in even though your capital gains is sub 50K?

 

[gayl]

Stock portfolio factored in even though your capital gains is sub 50K?

Statement or question directly at whom?

 

[Asabino]

My question is: If you only take out 50K in capital gains, is 50K the basis for ACA income?

 

[PaunchyPirate]

My question is: If you only take out 50K in capital gains, is 50K the basis for ACA income?

If you realize 50k in capital gains, 50k will indeed be counted toward the modified adjusted gross income that determines any ACA subsidy you may or may not be qualified for.

 

[RetiredAndLovingIt]

Thank you. I was a little concerned (although as a 23yo it's really up to him) when Kaiser turned out to be free using 2020 income and just $1 a month using 2021 income, still seems low

Does he have the Kaiser high deductible HSA plan? If so he pays the negotiated rates for every doctor visit, test, x-ray etc and the rates are pretty good. It's a good plan as long as he does not get really sick, the deductible last year was $690. If he's young and healthy pay as you go is a good deal as opposed to paying high monthly premiums and then never using the doctor.

 

[cathy63]

Thank you. I was a little concerned (although as a 23yo it's really up to him) when Kaiser turned out to be free using 2020 income and just $1 a month using 2021 income, still seems low

CoveredCA is ACA. Every state had the option of setting up their own exchange. Most didn't bother, but California is one that did. In addition to having our own exchange, we also have a longer open enrollment period and the state kicks in some money on top of the Federal subsidy. If your son is 23 and expects to earn around $20K or less, then his health insurance should be basically free.

 

[gayl]

He's only PT right now but about 2k month. And it probably is high deductible. Bought it because it's required

 

[fh2000]

Here is the link to California 2021 income limits for Covered California

https://www.coveredca.com/pdfs/FPL-chart.pdf

Single person income range eligible for Federal subsidy is between 138% ($17609) and 400% ($51040) FPL. California added its own subsidy up to 600%. Since your son earns $24000 in 2021, he is well within the range of receiving Federal subsidy as well as some California subsidy. As Cathy said, his income is low enough so his premium will be very low.

My DW estimated 2021 income for $30,000, and her ACA premium is $1 a month.

 

[gayl]

Does he have the Kaiser high deductible HSA plan? If so he pays the negotiated rates for every doctor visit, test, x-ray etc and the rates are pretty good. It's a good plan as long as he does not get really sick, the deductible last year was $690. If he's young and healthy pay as you go is a good deal as opposed to paying high monthly premiums and then never using the doctor.

he came over, and it is the Bronze plan. 2020 was tough on him as he's still only PT (but did pay off 1/2 of his student loans). I advised him to think of it only as major medical (hospitalization) & continue at the clinic he uses until he can upgrade to the silver plan. I shared that I did major medical only when starting out too.

 

[anothercog]

Does he have the Kaiser high deductible HSA plan? If so he pays the negotiated rates for every doctor visit, test, x-ray etc and the rates are pretty good. It's a good plan as long as he does not get really sick, the deductible last year was $690. If he's young and healthy pay as you go is a good deal as opposed to paying high monthly premiums and then never using the doctor.

What plan is that? I haven't found a deducible that low on Covered CA. I was pricing some potential plans and while the premiums are affordable with a subsidy, they still have family annual deductibles over $12k! If I'm looking at some of the plans with lower deductibles the premiums without subsidies are north of $60k/year!

 

[RetiredAndLovingIt]

What plan is that? I haven't found a deducible that low on Covered CA. I was pricing some potential plans and while the premiums are affordable with a subsidy, they still have family annual deductibles over $12k! If I'm looking at some of the plans with lower deductibles the premiums without subsidies are north of $60k/year!

Whoops that's a typo, I should have said $6900.
Sorry