Obamacare/ACA - Can anyone explain the income rules for me?

Dex

I'm looking at getting OC next year and I don't understand what goes into "modified adjusted gross income"

Here is my estimate for next year on income.
$14,000 pension
$29,000 Municipal Bond Fund income - not taxable on the Federal level.

Is the $29,000 included in the modified adjusted gross income?

I went to BC/BS and if I just enter the pension I get a Premium tax credit.
You are eligible for an estimated subsidy of
$6,084annually
$507 mo

With that I can choose plans that cost $0 or $105/ month.

http://www.irs.gov/Affordable-Care-Act/Individuals-and-Families/Questions-and-Answers-on-the-Premium-Tax-Credit
7. What is household income?

For purposes of the premium tax credit, your household income is your modified adjusted gross income

For 2013, for residents of one of the 48 contiguous states or Washington, D.C., the following illustrates when household income would be between 100 percent and 400 percent of the federal poverty line:
$11,490 (100%) up to $45,960 (400%) for one individual.

http://www.irs.gov/pub/irs-pdf/p5187.pdf

Dex

I think this answers it - muni bond interest included
http://obamacarefacts.com/modified-adjusted-gross-income-magi/

Dex

Worksheet 1-1. Taxpayer's Modified AGI—Line 2a
1. Enter your adjusted gross income (AGI)* from Form 1040,
line 38; Form 1040A, line 22; or Form 1040NR,
line 37 ............................ 1.
2. Enter any tax-exempt interest from Form
1040, line 8b; Form 1040A, line 8b; or
Form 1040NR, line 9b .......... 2.
3. Enter any amounts from Form 2555, lines
45 and 50, and Form 2555-EZ,
line 18 ................... 3.
4. Enter the excess, if any, of Form 1040,
lines 20a over 20b; or Form 1040A, lines
14a over 14b ............... 4.
5. Add lines 2 through 4 .................... 5.
6. Add lines 1 and 5. Enter here and on Form 8962,
line 2a ............................ 6.
*If you are filing Form 8814 and the amount on Form 8814, line 4, is more than $1,000,
you must also include on line 1 of this worksheet the tax-exempt interest from Form
8814, line 1b; the lesser of Form 8814, line 4 or line 5; and any nontaxable socia

bee

Dex,
If you don't need some of the OC coverages (you aren't a knock up pregnant women or you aren't knocking up women who have children), why not look for coverage outside of OC?

I have a HSA compatible plan and it's costs are equal to the same plan offered on the market place (OC) by the same insurance company. My plan doesn't have coverages that the OC plan has (which I don't need) and therefore the subsidy I qualified for was basically covering premium costs I didn't need...get it? I blew a few nights/ weeks and brain cells on this revelation.

I am 56 years old...don't admit to harming myself in anyway. I have a $5k deductible plan (which makes my policy HSA eligible) and I contribute to the maximum to my HSA. This HSA contribution lowers my taxable income by the same amount...nice. My premiums are $462/ month ($5544 / yr) and I contribute to my HSA (through Bruce Funds)...$4350 for 2015. I don't have any health issues so this might not work for everyone. If I could earn $5544 (cost of my insurance premium) in self employed income than my insurance premiums would be eligible for a tax credit (using a tax provision in the AGI section of the tax code). I need to work on this by paying more attention to Scott's stock tips.

But, If you are in a low income bracket the market place might be worth the hassle.

msf

@Dex - it looks like you got the right answer. There are different MAGI calculations for IRA deductibility, for Roth contributions (here, MAGI excludes Roth conversions), and for medical coverage (Medicare, ACA).

The latter, as you discovered, basically includes all taxable and tax-exempt income, including muni income and SS income (15%-100% is tax free, but all of it is included in this MAGI).

@bee Getting a plan outside of an exchange doesn't make it non-ACA. It does mean that you didn't get a Form 1095-A (documenting the marketplace plan you paid for).

From NYTimes: "In general, health policies effective Jan. 1 [2014], whether sold on the exchanges or off, must comply with the Affordable Care Act. That means they have to offer the same menu of essential benefits, like drug coverage and maternity care, and can’t deny you coverage if you’re already sick. And, insurers who sell policies both on and off the exchanges must sell the same plan for the same price."

The article goes on to explain why some plans might appear in only one place or the other (having to do primarily with marketing and state regulations).

Regarding HDHP - it's not just having a high deductible that makes a plan HSA-eligible. it also has to force you to pay that deductible for all services outside of preventive care. So if you need to go to your PCP for the flu, you're not just charged a co-pay, you're charged the negotiated rate for the "visit", until you hit your deductible. I agree with you that HSA-eligible plans can be a good deal, but there's more to them than just the size of the deductible.

Regarding that tax credit - you get a top-line deduction of income for the premiums you pay (i.e. it reduces your MAGI, even for ACA-subsidy purposes), but AFAIK, no credit. The deduction appears as line 29 on Form 1040.

Crash

I was in MassHealth. It's not exactly ObamaCare, it's the Massachusetts Medicaid low-income plan offered by the Commonwealth. It's a game of smoke and mirrors. False information. NO information. Promises to fix the error. Nothing done. We ended up back in the plan with wifey's employer. Ridiculously expensive, given our income. But at least you can talk to someone who MIGHT know what they're doing. Apologies to Dex. Sorry, this won't help you in the least....

davidrmoran

Crash, Mass. friends who had terrible time w the state exchange now tell me it is much fixed and mostly smooth sailing --- have you revisited to check if your situation might be worth swinging back? Just a thought, not arguing your experience.

[Deleted User]

The user and all related content has been deleted.