When to do ACA sign up?

[disneysteve]

We are currently on COBRA. That's good for 18 months I believe. Our first month was September 2022 so our 18th month will be February 2024. At that point, we'll need to buy our own insurance. How far in advance do I need to do that to have coverage start on time?

 

[Aerides]

We are currently on COBRA. That's good for 18 months I believe. Our first month was September 2022 so our 18th month will be February 2024. At that point, we'll need to buy our own insurance. How far in advance do I need to do that to have coverage start on time?

I'd do it at the start of February, as the end of Cobra is a qualifying change. California has longer cobra.

Of course, you can just drop it with open enrollment and start Jan1 if you'd like. Either way, I'd shop around during the open period so you are signed up and ready to go when you want.

 

[xlf11]

Cobra is very expensive. We did use it for the first year due to too high income for ACA subsidy and switched to ACA the following year. You could start from 11/1/23 until 1/15/24 for 2024 ACA plan.

 

[PaunchyPirate]

I believe you can initiate and select your ACA policy within 60 days of your upcoming loss of coverage (it may vary by state if your state does not use the Federal Exchange at healthcare.gov). Assuming you plan on keeping COBRA until February 28th. I'd probably start your selection process within the ACA insurance exchange website the first week of January. You should be able to indicate March 1 as your effective start date at that time. This will give you ample time to get it all in process. Some times, the exchange will ask you to provide documents that verify income and such and that can take a little time.

You can review 2024 pricing and policy coverages/networks/etc. on November 1 of this year when open enrollment for 2024 starts.

 

[GenXguy]

Of course, you can just drop it with open enrollment and start Jan1 if you'd like. Either way, I'd shop around during the open period so you are signed up and ready to go when you want.

This is what I'm going to do. Drop COBRA at the end of the year and switch to an ACA marketplace plan. Deductibles look higher but lower premium after the PTC.

Some times, the exchange will ask you to provide documents that verify income and such and that can take a little time.

I kind of dread that part since I'm unemployed as of the middle of this year, and all income for 2024 is likely going to be various types of investment income, not retirement income of any type. And I want to estimate it (by controlling my income) as to get a silver plan with CSR if possible, and if I underestimate because of unexpected higher investment returns, I understand I have to make up the difference in the PTC at the end of the year.

 

[PaunchyPirate]

I kind of dread that part since I'm unemployed as of the middle of this year, and all income for 2024 is likely going to be various types of investment income, not retirement income of any type.

Fingers crossed for you. As a data point, I'm currently in my 4th year on the ACA and I've never been asked to provide any supporting docs. I DO agree to give the exchange access to my yearly tax returns so they can see whatever they want to see. Perhaps that is why. But that is optional for you to do, I believe. Also, 2 of my years have been on Pennsylvania's state exchange, which opened in 2021. State exchanges seem to have varying documentation requirements.

 

[aaronc879]

....And I want to estimate it as to get a silver plan with CSR if possible and make up the difference in the PTC at the end of the year.

You should know that if you are doing what it sounds like you are doing it is illegal, no different than tax fraud. If you estimate your income low to get subsidies and/or CSR that you know you don't qualify for then that is illegal. If you start out with a low estimate then realize you are going to make more than you thought then you are required to change your income estimate which is a life event so you can change your plan too if you want. You can't intentionally give a low estimate to get benefits you don't actually qualify for. If that is what you are doing then I would not advertise it since it is a chargeable offense.

 

[Aerides]

Ah yes deductible - OP you are probably aware, but anything you ring up under cobra in Jan/Feb would not count toward your (almost certainly) higher deductible on the ACA. Especially if you pick a plan that allows you to continue to contribute to your HSA.

 

[disneysteve]

Thanks everyone. I had forgotten about open enrollment so we may choose to drop COBRA sooner. I believe the ACA premium will be lower, but the out of pocket costs will likely be higher including a deductible (which we don't have now).


I went with COBRA because my wife was in the midst of some major medical stuff and I didn't want to change coverage during that. She's pretty much done now except for some follow up care so changing in the fall or January 1 shouldn't be an issue. And great point about losing 2 months toward the deductible if we don't switch until 3/1.

 

[GenXguy]

You can't intentionally give a low estimate to get benefits you don't actually qualify for.

I'm actually talking about regulating my income as needed as many people do to get ACA subsidies, so I would be estimating based on that real plan/projection. But due to unexpectedly higher investment returns that may occur, I realize I could have to make up the difference at the end of the year. I may not know until the end of the year 2024 since that's when I would be getting most of my dividends or selling any investments. I don't even know about CSR at this point due to the higher interest I'm earning now on CDs, which is why I mentioned my deductibles would be higher on ACA. I have a few months before I have to be too concerned about the details.

 

[jim584672]

If you have high income in the front of the year and some low months after you retire there is a trick that works. Since I was locked into Medicaid due to the pandemic the last three years, I recently got recertified, but annual income is too high. Turns out one low month in the recert month locks you in for a year, at least in NY. I reported the too high annual income, and the low month income at the same time, and it put me in. Some months are very low while others are way high. Reporting high income after you are on it doesn't make you lose it, because they only care about the recert month.


This is also good to know if you want to avoid Medicaid, since you may be put in it if you report income in a certain way, so never report a low month and you avoid it.

 

[Aerides]

changing in the fall or January 1 shouldn't be an issue.

You cannot change in the fall. Once on cobra you can only come off when it ends, or for annual enrollment, so Dec 31 with an ACA plan on Jan1. If you cobra continues through Feb24, you can't say "eh, I'll drop it in October" - you are locked in.

But yes you can shop in the fall for a plan to start in 2024, and then decide which way to go.

 

[disneysteve]

You cannot change in the fall. Once on cobra you can only come off when it ends, or for annual enrollment, so Dec 31 with an ACA plan on Jan1. If you cobra continues through Feb24, you can't say "eh, I'll drop it in October" - you are locked in.

But yes you can shop in the fall for a plan to start in 2024, and then decide which way to go.

Ah. Gotcha. I thought open enrollment meant you could enroll then, but you'd only be enrolling to start January 1. Got it. Thanks for the clarification.

 

[disneysteve]

Estimating income is always a guessing game since a lot of investment income is back loaded to the end of the year. I have no idea what capital gains will be in December. Could be 5K, could be 20K. Past years are of no use in predicting future years in that regard. We just have to make our best estimate and then go from there.

 

[jim584672]

You cannot change in the fall. Once on cobra you can only come off when it ends, or for annual enrollment, so Dec 31 with an ACA plan on Jan1. If you cobra continues through Feb24, you can't say "eh, I'll drop it in October" - you are locked in.

But yes you can shop in the fall for a plan to start in 2024, and then decide which way to go.

There is one way around the COBRA lock in. Qualify for Medicaid, then it becomes secondary payer to COBRA, then cancel COBRA. Work insurance and Medicaid can co-exist.

 

[badatmath]

My former w*rk advised me to just not pay cobra if I wanted to cancel. I was asking about dental in that case. IDK if it works because I haven't done it.

 

[PaunchyPirate]

My former w*rk advised me to just not pay cobra if I wanted to cancel. I was asking about dental in that case. IDK if it works because I haven't done it.

That probably works to cancel your COBRA. But I doubt that makes it a qualifying event to start ACA coverage at the same time you cancel.

 

[GenXguy]

If you have high income in the front of the year and some low months after you retire there is a trick that works. Since I was locked into Medicaid due to the pandemic the last three years, I recently got recertified, but annual income is too high. Turns out one low month in the recert month locks you in for a year, at least in NY. I reported the too high annual income, and the low month income at the same time, and it put me in. Some months are very low while others are way high. Reporting high income after you are on it doesn't make you lose it, because they only care about the recert month.

This is also good to know if you want to avoid Medicaid, since you may be put in it if you report income in a certain way, so never report a low month and you avoid it.

I was going through some online forms that provide an estimate of benefits and eligibility, and they had a place to enter monthly income, but it doesn't say to enter the previous month, current month, or the average expected monthly income for the entire year. My monthly income varies a lot also, but my average monthly income would definitely be way over the limit. I'm in IL, not NY.

 

[Aerides]

I was going through some online forms that provide an estimate of benefits and eligibility, and they had a place to enter monthly income, but it doesn't say to enter the previous month, current month, or the average expected monthly income for the entire year. My monthly income varies a lot also, but my average monthly income would definitely be way over the limit. I'm in IL, not NY.

Just keep it simple. If you expect to make, say, $48k per year, just put $4k per month. It all evens out in the wash. If you really have no idea what you'll make go with something near the top end of estimates that allow for a subsidy, so you have less chance of a claw back at tax time. Then adjust the following year, and so on.

 

[jim584672]

I was going through some online forms that provide an estimate of benefits and eligibility, and they had a place to enter monthly income, but it doesn't say to enter the previous month, current month, or the average expected monthly income for the entire year. My monthly income varies a lot also, but my average monthly income would definitely be way over the limit. I'm in IL, not NY.

The reason for asking monthly is because Medicaid is based on current monthly income. So if you put under $1,677 it will put you in Medicaid.

 

[jmmec]

The reason for asking monthly is because Medicaid is based on current monthly income. So if you put under $1,677 it will put you in Medicaid.

I found the ACA application and attached a picture of the "Income" section if you are a retired person. It asks you to break down the "Other income you get this month" (with many categories as if it should be exact) and also has a box to fill in "Your total income this year".

Say a person has erratic monthly income ($0 in the month they apply for ACA), but also report that their annual income will be $48k. What happens? Will you will be forced on Medicaid some months of the year, but then have to re-signup for ACA for those months that your income exceeds $1,677 which would include a resetting of your deductible?

To avoid Medicaid, would it be appropriate to write $4k for "Other income you get this month" and $48k for "Your total income this year", even though the $4k is incorrect and is really $0 in my example?

Thanks!

 

[jim584672]

I found the ACA application and attached a picture of the "Income" section if you are a retired person. It asks you to break down the "Other income you get this month" (with many categories as if it should be exact) and also has a box to fill in "Your total income this year".

Say a person has erratic monthly income ($0 in the month they apply for ACA), but also report that their annual income will be $48k. What happens? Will you will be forced on Medicaid some months of the year, but then have to re-signup for ACA for those months that your income exceeds $1,677 which would include a resetting of your deductible?

To avoid Medicaid, would it be appropriate to write $4k for "Other income you get this month" and $48k for "Your total income this year", even though the $4k is incorrect and is really $0 in my example?

Thanks!

I just went through this in NY. I put down the annual amount, which is too high for Medicaid, and the current month below $1,677, and it put me in Medicaid. NY locks you in for a year once you are in. If you report high it says "ineligible" but the plan stays anyway and you don't lose it.

 

[GenXguy]

The reason for asking monthly is because Medicaid is based on current monthly income. So if you put under $1,677 it will put you in Medicaid.

But current monthly income would be "estimated" since I assume that means for the current month, which isn't over yet. The form didn't make any reference to the "current" month. It was an eligibility form that is supposed to provide an indication of eligibility, not an application form that would ultimately determine if you are eligible.

https://abe.illinois.gov/abe/access/accessController?id=0.7818022872435612

 

[jim584672]

But current monthly income would be "estimated" since I assume that means for the current month, which isn't over yet. The form didn't make any reference to the "current" month. It was an eligibility form that is supposed to provide an indication of eligibility, not an application form that would ultimately determine if you are eligible.

https://abe.illinois.gov/abe/access/accessController?id=0.7818022872435612

They want to know current month income OR estimated yearly income. If you choose monthly you put in the actual income for the month and if under $1,677 it goes to Medicaid. That is how it works in NYSOH.

 

[SecretlyFI]

If you’re filling this in during annual enrollment for coverage to start Jan 1, are you supposed to fill in current year income amounts or estimate of next year income? Specifically, if 2023 is final year employed, income is very high but will drop drastically in 2024 when retired. If I use the lower numbers will it cause a problem when they get my 2023 tax return and see much higher numbers, or they will only care about 2024 income when they get that tax return in spring of 2025?