The ACA (Preface... please don't get political)

[Sac Arrow]

Yes, the Affordable Care Act. Obamacare. We all have our opinions on it, and I suspect most of us feel the same way. But this is not about that specifically.

Today I just got an email notification that I have a tax document from my medical provider that states that I have an IRS form that states I have a health insurance plan that conforms with the ACA.

1. I thought the ACA was repealed four years ago. Yes, I looked in to it. No, it wasn't.

2. The ACA was in effect since 2010. The current year is Stardate 2021. That means for the past ten years my health care provider has not provided me with this form. Ostensibly, failure to have a mandated health care plan in compliance with the ACA is fineable.

The fine is, I'm not sure, but "let me pull my wallet out and fling a few tens about the parking lot" but I just wonder, have I been incurring fines for the last ten years?

I'm guessing my CPA probably categorized it as one of those "who cares the amount I'm saving you is several orders of magnitude of the penalty" and that is probably true. My beef is with my health care provider. They seem to have missed the boat for ten years and now they woke up.

I dunno, has anyone else experienced this issue?

And by the way yes, I would LOVE to hear about exactly why.... (but it will only get the thread locked, so save it for your Facebook and Instagram, can we agree on that?)

 

[Bell206]

1. I thought the ACA was repealed four years ago. Yes, I looked in to it. No, it wasn't.

No. The individual mandate was. No one forced to by insurance.

The ACA was in effect since 2010.

ACA went live Jan 1 2014. Six months before I retired.

I have a health insurance plan that conforms with the ACA.

That is a requirement at a higher level.

Ostensibly, failure to have a mandated health care plan in compliance with the ACA is fineable.

Unless you personally purchased healthcare through a state or federal ACA marketplace and received a subsidy, and did not follow those subsidy rules, I don't see how you are going to be fined or why.

 

[wrbix]

Recommend checking with your accountant (or whomever files your fed taxes) to see how they reported this in prior years....suspect the default would be to affirm that your insurance conformed with the ACA. I don’t really think health care providers have a part in this reporting. Why they got involved this year (if indeed they did) is unclear.

 

[Doc Holliday]

IBTL

 

[Matthew]

I didn’t know you could even get a non-ACA compliant policy anymore. I know there are catastrophic coverage policies, but I thought they were limited to < 26-28(?) year olds.

 

[Bell206]

I didn’t know you could even get a non-ACA compliant policy anymore.

It gets a bit complex. When the individual mandate was repealed some states allowed the offering of non-ACA compliant healthcare planes. However, some other states put a local penalty on people who did not have ACA compliant plans. A classic cluster.

I know there are catastrophic coverage policies, but I thought they were limited to < 26-28(?) year olds.

Less than 30 years old. When ACA went live it screwed up my entire retirement healthcare plan.

 

[Matthew]

I don’t think my State has an exchange, so everything I can get is on the healthcare.gov website. I even checked around with local places like BCBS and they directed me to the ACA website.

I like my plan, I wish I could keep my plan.

 

[Sac Arrow]

No. The individual mandate was. No one forced to by insurance.

ACA went live Jan 1 2014. Six months before I retired.

That is a requirement at a higher level.

Unless you personally purchased healthcare through a state or federal ACA marketplace and received a subsidy, and did not follow those subsidy rules, I don't see how you are going to be fined or why.

Can you expand on that? My policy is through work. Are you saying I'm good to go?

 

[Bell206]

Can you expand on that? My policy is through work. Are you saying I'm good to go?

If your healthcare is through work there should be nothing more for you to do. A quick call to your HR dept will confirm. ACA provides expanded Medicaid coverage in certain states and provides a marketplace to those who do not have insurance through their employer. Full stop. Originally, ACA mandated everyone above 18 to have insurance either through medicaid, employer, or ACA marketplace. When individual mandate was repealed that changed in several states and no federal IRS penalties. Once I retired early (2014) I could either use medicaid, pay an ever increasing monthly premium (currently $850+), use the marketplace, or have no insurance and pay max penalty of $900 per year. If you really want me to really expand I'll have this thread locked in one post.

 

[Bell206]

I like my plan, I wish I could keep my plan.

Unless you're about to hit 65 why can't you keep your plan?

 

[cowman]

Anyone know if it's possible to get a catastrophic coverage only plan in IL and how you find them? I'm paying more every month with this ACA plan than I would out of pocket over a whole year... all I really need is coverage in case of some unexpected major 5-6 figure event.

 

[Matthew]

Unless you're about to hit 65 why can't you keep your plan?

There’s that gap between retirement and 65 I have to cover.

 

[Bell206]

There’s that gap between retirement and 65 I have to cover.

Was/am in same boat as I left at 53. If your work provider also lists on the marketplace contact them directly for info on a similar plan on the marketplace. This is the route I used when I could not use my original retire healthcare plan using a catastrophic policy and self insuring the 1st $15k. Found a plan very close to my work group policy till it was dropped from the marketplace due to cost.

 

[Bell206]

Anyone know if it's possible to get a catastrophic coverage only plan in IL and how you find them?

FYI: Unless your state drop certain ACA mandates which I doubt IL did, catastrophic policies are only available to people less than 30 years old.....

 

[cowman]

FYI: Unless your state drop certain ACA mandates which I doubt IL did, catastrophic policies are only available to people less than 30 years old.....

I figured it wasn't possible but hoped someone knew something I didn't. I would love to say more but it would be political.

 

[Matthew]

Was/am in same boat as I left at 53. If your work provider also lists on the marketplace contact them directly for info on a similar plan on the marketplace. This is the route I used when I could not use my original retire healthcare plan using a catastrophic policy and self insuring the 1st $15k. Found a plan very close to my work group policy till it was dropped from the marketplace due to cost.

I’ve already looked into that. I have some time to work on it.

 

[steingar]

I asked my doc about it. He really didn't have an opinion. I asked the gal who did my medicals back then. She started swearing a blue streak, and she was the most mild mannered little thing you ever saw. I think the disparity was my main doc mostly sees guys like me who already have good insurance, while the AME was actually a DO (a lot of them are) and provided medical services to folks with less stellar insurance coverage.

 

[Sac Arrow]

If it sounds like I have no idea of how the whole thing works, it's because I have no clue how the whole thing works.

We have no HR department per se, but I suppose our insurance broker can break it down.

 

[DaleB]

I don’t think my State has an exchange, so everything I can get is on the healthcare.gov website. I even checked around with local places like BCBS and they directed me to the ACA website.

Just a friendly word of advice. If you do visit healtcare.gov, be sure to provide an email address that you can discard afterward. In contemplating early retirement, I went there to try to get SOME IDEA of what medical insurance would cost me on my own. That mission failed spectacularly -- every single path ended with the site wanting my phone number so a sales rep could call me, which I'm just not going to deal with. However, the email address that I used -- which I made up specifically for that visit and have never used anywhere else, ever -- has been inundated with SPAM from a number of non-medical sources. Apparently whoever it is that operates the site, or some of the companies that they supply information to, is/are selling the contact information to whoever wants it. I put a filter on my mail server to discard any and all email arriving for that address, but I still see delivery attempts daily.

 

[Bell206]

If you do visit healtcare.gov, be sure to provide an email address that you can discard afterward.

FYI: you can peruse the plans and estimated cost without opening an account, i.e., email, on healthcare.gov. At main screen click "Get Coverage" menu... then on 2nd screen click "See Plans & Prices" preview button at bottom. That will take you through the process. After you look at everything you want there will be a link to open an account if you want or leave the site. Keep in mind there are specific income limitations that control ACA policy premium and deductible subsidies. If you enter an income below the ACA range Medicaid is your only option. If income above the range, only full prices will be shown. Silver plans give you the best premium/deductible tax credits. I checked plans/prices this way on a regular basis for a couple years, no account or email needed. But even after made an account never got hit with spam unless you clicked the "help" boxes???

 

[Matthew]

Just a friendly word of advice. If you do visit healtcare.gov, be sure to provide an email address that you can discard afterward. In contemplating early retirement, I went there to try to get SOME IDEA of what medical insurance would cost me on my own. That mission failed spectacularly -- every single path ended with the site wanting my phone number so a sales rep could call me, which I'm just not going to deal with. However, the email address that I used -- which I made up specifically for that visit and have never used anywhere else, ever -- has been inundated with SPAM from a number of non-medical sources. Apparently whoever it is that operates the site, or some of the companies that they supply information to, is/are selling the contact information to whoever wants it. I put a filter on my mail server to discard any and all email arriving for that address, but I still see delivery attempts daily.

Yeah, there is a way to get estimates without putting in any personal info, but they don't make it easy to find.

https://www.healthcare.gov/see-plans/#/

You can enter your and your spouse's age, zip code, and whether or not you are a smoker. Then put in a large number for estimated taxable income and you'll see the full prices. If you put in a lower number, you'll see the subsidized prices.

I have a company provided plan right now (BCBS), and I checked into getting a private version of the same thing. BCBS said they don't do individual plans anymore and referred me to the gubmint website. There, I could shop around for high deductible, high premium plans that our docs are not in-network. So I have that going for me, which is nice. I was able to find 2 plans that have both our docs as in-network, though. I'll have to go this route for a little while until 65.

The "ACA Cliff" is your taxable income. If you are below poverty level you don't qualify for an ACA plan, you are on Medicaid. If you are 4x poverty level you don't qualify for a subsidy. If you are pretty much anywhere in between, your premiums are subsidized and can be as low as $50 - $200. If you are one dollar above, you will pay full price. For our ages and zip codes it's around $1600-$2000/month for the two of us.

If you can live off a combination of savings (already taxed) and taxable income (IRA, 401k distributions) and stay between those high and low limits, you can cut a lot off those premiums. (I *think* that's how you can play the game. I do need to verify with a pro on that, though.)

 

[A1Topgun]

To quote Ringo Starr, "Everything the government touches turns to cr@p!".

 

[Everskyward]

I dunno, has anyone else experienced this issue?

No, but what I remember from that yearly document is that it says to keep if for your records in case someone questions whether or not you had the required health care coverage. It's not something they submit to the IRS. Yes, your health insurer was supposed to provide it, but not sure it makes much difference what was done in the past.

 

[Bell206]

stay between those high and low limits, you can cut a lot off those premiums. (I *think* that's how you can play the game. I do need to verify with a pro on that, though.)

Yes. I was living off savings, i.e, no income per MAGI, before I signed up and had to increase my MAGI income above the Medicaid max limit in order to even qualify for the subsidies. However, also tried to keep the income below the deductible subsidy cutoff which for a single account is around $29k. So since 2016 I've been balancing using savings (non-MAGI) and misc income (MAGI) to pay my everyday bills AND stay within the ACA subsidy income limits. The hardest part for me was to turn down a chance at some beer money income because that short term monetary gain would have a future ripple affect on my ACA subsidies and end costing me more in the long run.

FYI: One question to ask your ACA pro if you use one is the effect of your past/future income on your ACA rate. Even though the ACA app states what you think you'll make for the next year... they will actually look back at 5 years of income to compare on your guess. Was told every one gets looked at based on their own IRS history.

 

[DaleB]

FYI: you can peruse the plans and estimated cost without opening an account, i.e., email, on healthcare.gov. At main screen click "Get Coverage" menu... then on 2nd screen click "See Plans & Prices" preview button at bottom. That will take you through the process.

And so you can, thanks. I learned something new today.

The "ACA Cliff" is your taxable income. If you are below poverty level you don't qualify for an ACA plan, you are on Medicaid. If you are 4x poverty level you don't qualify for a subsidy. If you are pretty much anywhere in between, your premiums are subsidized and can be as low as $50 - $200. If you are one dollar above, you will pay full price. For our ages and zip codes it's around $1600-$2000/month for the two of us.

If you can live off a combination of savings (already taxed) and taxable income (IRA, 401k distributions) and stay between those high and low limits, you can cut a lot off those premiums. (I *think* that's how you can play the game. I do need to verify with a pro on that, though.)

A friend of mine will be using ACA coverage for a year and a half between retirement and when he turns 65 and can go on Medicare. The way he explained it... they have to stick to $68K per year or less, and will get a $1200 per month subsidy. EVERY penny counts as income regardless of where it comes from. COVID stimulus checks included, of course. The ACA subsidy is taxable, so there's a tax bill that effectively offsets a few grand of the subsidy. If they go one penny over $68K for any reason, they have to pay ALL of the total subsidy back.

I did look at the plans. We have a couple of different health care systems around here. One of them my wife and I have agreed that if we're bleeding out in front of the ER door, the other is instructed to load us in the car and drive us to the other hospital. Of course coverage for that system is cheaper. Assuming no subsidy, COBRA would be cheaper for us. For that matter, if I retire from my present job I can continue my current coverage indefinitely at the full price -- which is about what the ACA coverage would cost, it's just a better plan. Either way, the cost of medical coverage is the one and only thing keeping me from retiring right now.

 

[Everskyward]

If you can live off a combination of savings (already taxed) and taxable income (IRA, 401k distributions) and stay between those high and low limits, you can cut a lot off those premiums. (I *think* that's how you can play the game. I do need to verify with a pro on that, though.)

Also, reinvested capital gains and dividends from mutual funds in taxable accounts count as income, so even if your cash flow doesn't meet the threshold, your total income could. I took all this into account before I stopped working. I was covered by COBRA for 18 months, which was much less expensive than ACA. My premium for myself only is about $1300/month. That is a silver plan, not the minimum. It had been going up yearly, but surprisingly it went down by $15/month this year.

 

[Matthew]

... but surprisingly it went down by $15/month this year.

That's because you are such a nice person.

 

[Matthew]

Yes. I was living off savings, i.e, no income per MAGI, before I signed up and had to increase my MAGI income above the Medicaid max limit in order to even qualify for the subsidies. However, also tried to keep the income below the deductible subsidy cutoff which for a single account is around $29k. So since 2016 I've been balancing using savings (non-MAGI) and misc income (MAGI) to pay my everyday bills AND stay within the ACA subsidy income limits. The hardest part for me was to turn down a chance at some beer money income because that short term monetary gain would have a future ripple affect on my ACA subsidies and end costing me more in the long run.

FYI: One question to ask your ACA pro if you use one is the effect of your past/future income on your ACA rate. Even though the ACA app states what you think you'll make for the next year... they will actually look back at 5 years of income to compare on your guess. Was told every one gets looked at based on their own IRS history.

With a retirement date looming, I will probably have to COBRA to the end of whatever year it is, then try to play the income game until 65. Otherwise, for 2 people at our age, it's looking close to $20k-$24k per year in premiums.

 

[Bell206]

then try to play the income game until 65.

FWIW: another method I'm aware of is from several people that restructured their investments prior to retirement (60) by calculating their living expenses till 65 and withdrew that amount taking the tax hit all at once while still working. Then for the next 5 years did the same thing I do balancing between savings and income for the highest subsidy. As I recall a couple of them rolled over a traditional IRA into a Roth, paid the tax, then funded their retirement living expenses with the non-income Roth money and used other investment withdrawals to meet the income requirements for ACA until they hit 65. They also went the Bronze plan route and had yearly premiums for 2 people at $0 with high deductibles ($12,000) and higher co-pays 30% ??? I think their silver costs would have been around $6000/ year for 2 with deductible in the $3000 range, but elected the bronze plan. If I remember they used a MAGI income of $30k or $35k (for 2) for the ACA subsidy calc and then used $30k+ in savings enjoy life. Its been a few years so I may be off on some of the numbers but they're close. You can run current numbers on the hc.gov. The key is to keep your MAGI income level as low as possible.

 

[Matthew]

@Bell206
We’re already working on the savings restructuring. The plan will be to take that tax hit in my retirement year when I wouldn’t be eligible for a subsidy anyway. COBRA can carry me the rest of the year. Sounds like you and I are on the same page here.

 

[hindsight2020]

Either way, the cost of medical coverage is the one and only thing keeping me from retiring right now.

Now you know the real reason I agreed to stick around for 20yrs indentured servitude. Long story short, I wasn't gonna go down like that. My little nuclear family and I are getting the [de facto] Medicare lifeboat at 46 as part of my indentured contract with His Majesty's Legion.

Since any more nuanced commentary on this topic is not allowed here, I'll just close by wishing those holding on to the imposition of unwanted-laboring beyond your desired age merely waiting on the Medicare life boat, my sincere condolences, and may the odds be forever in your favor.

 

[DaleB]

Now you know the real reason I agreed to stick around for 20yrs indentured servitude.

That was absolutely my intent when I enlisted. It didn't take me too long to have a good look at the condition of those retiring, and decide I'd rather live long enough to enjoy my retirement -- even if it were two decades later. Mind you, I enlisted in 1977, when US built cars weren't the only things that just royally sucked. When I got out, the "promise" of being able to use government health facilities for the rest of our lives was more like a threat. Lots of changes since then, thankfully.

 

[flyingron]

I've been self-attesting that I have insurance on every tax return I've filed since the ACA went into effect. It's never been an issue notwithstanding even my lack of employment.

 

[Matthew]

I've been self-attesting that I have insurance on every tax return I've filed since the ACA went into effect. It's never been an issue notwithstanding even my lack of employment.

That's the way to stick it to the man!