Questions to consider:
o What is the difference in terms of annual premium payments for comparable Bronze and a Silver plans (comparable in terms of deductible and out-of-pocket caps.)
Note: Fundamentally there is a huge difference between Bronze and Silver plans when it comes to co-payment and prescription drug coverage. Let us not ignore this but for the time being but put it aside for later consideration.
o If there is a significant difference in annual premium payments between a Bronze and a Silver plan, assuming that Bronze is cheaper,does it make sense to go with a Bronze plan and “self-insure” a portion of the expenses
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o What if I take on a part-time j*b and earn $5,000 (or $10,000) in W2 wages? How does it affect my ACA insurance premiums (Assuming my part-time empl*yment doesn't offer healthcare coverage)
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o What if I go with a Bronze plan that is HSA-compatible? Will it reduce my O-MAGI
o The difference in the premiums was consistent between the Bronze and Silver plans regardless of the O-MAGI level
o At first pass Bronze edged out over Silver due to the $936 in premium savings.
I'm generally healthy with no preexisting conditions. But considering the number of PT visits (26 @ $120 per) needed by me over the coming year we are leaning toward the silver plan. I'll need to have a conversation with my PT provider before making a final decision
o Additional W2 wages is a suckers bet.
Say I earn an additional $5000 gross.
First off it won't increase my eventual social security benefit one iota. Social Security calculates your average indexed monthly earnings during the 35 years in which you earned the most . I've already met the 35 year threshold and I doubt $5000 is going to make a significant difference in the benefit payout.
Secondly, that additional $5000 in earnings will have an effective tax rate of 25.18% – ouch! ;
MyMath-> 7.62% FICA/Medicare plus 0% Fed plus 1% state plus 16.56% lost subsidy ($828/$5000).
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o Funding a Health Spending Account (HSA) will reduce one's O-MAGI dollar-for-dollar.
HSAs are restricted to High Deductible plans like the PPACA Bronze offerings. Since I'm not going with a Bronze plan an HSA is not a consideration.
Note: HSAs are a new area for me. I'm under the impression that one can fund an HSA with after-tax dollars. Doing so is not as beneficial however as compared to the W2 wage slaves out there who can fund an HSA with pre-tax dollars right out of their paycheck. Gee, had I known.
Dollars in an HSA grow tax free. After retirement HSAs work a lot like an IRA. Finally, in retirement, dollars in an HSA fund can even be used to pay Medicare premiums.
Wow. That's a lot of topics. I didn't go over with a fine tooth comb -- But there are some glaring misperceptions.
The information about the part time job being a sucker's bet is wrong.
If you had a small amount of W2 wages, you can pretty much shelter the whole thing as a contributory tax deductible IRA, and have that not affect your MAGI. At an ER age, you can shelter $6,500, and for a couple $13K. That's a lot of Moolah!
If you have 1099 income, that gets even better. In addition to the above you get to take off the entire insurance premium paid by you and half the self employment tax right off of the MAGI. On top of that you can open a SEP IRA and shelter an additional 18.6% of your income.
If your premium is $300/month, a quick back of the envelope calculation says a 1099 income of $30K (Thirty Thousand Dollars) would add less than $5K to your MAGI. If you fund your HSA (see below) even that would completely go away.
I posted the following in a different forum topic, but I think it is more relevant here.
The profile of an ER is ideally suited to exploit HSA compatible plans in the ACA.
The fact that you are an ER means a) you have some reasonable amount of wealth accumulated b) You probably qualify for subsidy as earned income has tapered off c) You can control your MAGI d) You are savvy enough to do ROI calculations e) You probably qualify for accelerated amount for HSA contribution.
Don't jump at the first silver plan you get your hands on. Compare your favorite silver plan with a HSA plan.
A sample trade off calculation for amount before your reach out of pocket max on either plans may look like this:
Premium difference at same MAGI: $1800
Premium reduction due to MAGI reduction: $300
Tax savings from HSA contribution: $800
Silver deductible: $2500
Silver copay to be paid anyway: ~1000
You are looking at around $6,400 which is about the same as the out of pocket max even on the Bronze HSA plan. You are better off taking the sure money savings provided, and even in the worst case you are really no worse off.
If your prescription drug usage is high or if you are on some expensive maintenance regimen then the calculations will be different.
You have to run numbers to your specific case including your spouse etc, but the gist of the argument still is valid.