Just got my notice in the mail from my 2017 health insurance provider. Should I choose the same plan, it will be up 142% next year! 
Now, Iām anxious to see what other options Iāll have on November 1st as estimates in my state indicated it would be up a lot but not that much.
If your daughter earns enough money so that she is not a dependent in 2018 and no longer on your policy, then she will file a separate tax form and you will follow the āallocationā process for the form 8962 (line 9). Instructions for that are complex so I donāt understand them fully and am not going to try to explain them.
As you are self-employed, you also qualify for self-employed health insurance adjustment and have to go through the process of reconciling your self-employment deduction with your Advance Premium Tax Credit every year, so that complicates things further ā but it does mean that even if you donāt qualify for the tax credit, you are getting a substantial writeoff ā and very often that self-employed tax deductiion will be the number that reduces your AGI to a level to qualify for subsidies.
If your daughter gets a job that pays well enough to bump you over the limit, she probably will not qualify as a dependent. I know that when my daugher graduated she started a job in June; her salary was about $35K per year, and I did not claim her as a dependent. Howetl aid so it wasnāt rocket sicence to figure out that I was in no way contributing half of of her support, when she was on her own for 7 months of the year. That was before ACA and my daughter had employer-provided insurance.
I think that the situation is complicated but you are overstressing. Can you afford your insurance without a subsidy? If thatās iffy, you might want to switch to a bronze level HSA plan so that you can have the extra HSA deduction to reduce your AGI in 2018.
If it is all making you crazy to think about it ā just figure out what your tax credit it and either waive the advance payments (pay as you go) ā or be prepared to pay it back in 2019 if necessary. There is no penalty - just paying back money you were given as an advance tax credit ā so it still comes down to a pay now vs. pay later determination. I realize that cash flow can be a problem, but if so you can take the subsidy, but track how much you are getting, and then in October-January when your cash flow improves, bank the money you might need to pay back.
And yes, when your daughter gets a job and you report a life change, if you are no longer insuring her, your household size goes down-- and with that the threshold to qualify for subsidies. Which is why it is important to report the life change promptly, because paying back 5 months of subsidies it turns out you didnāt qualify for is going to be a lot less than paying back 12 months of subsidies.
If you have more questions, can you provide some more info? Are you currently a household of 2 (you and daughter), or are there other familiy members? Your income fluctuates from year to year, but what is ball park range?
As you are self-employed there are other AGI-reducing deductions you can take advantage of - for example, do you have a KEOGH or SEP-IRA? That is a huge tax write off that goes up along with your income.
Plus, we self-employed people have a lot of legitimate income-reducing (business expense) strategies we can use if we are close to the line near yearās end. If Oct-Jan is the busiest time, maybe a good time to hire temporary help. If youāve earned more than anticipated, maybe a good time to reinvest in your business and replace some older equipment ā and write that off as a Sec. 179 cost. If youāve done the math so you know what the subsidy amount is, and you keep good track of business income & expenses, itās easy to figure out what business spending is cost-effective. (Example: if you have been getting a subsidy of $500/month for the first 5 months, that will be $2500-- so if spending $2500 on deductible business expenses will bring your income down low enoughā¦ then go ahead and do that. Iām not saying to cheat, Iām saying that we self-employed people pretty much always have legitimate things that we need for our work but have been postponing to save money. Especially when income is erratic. And in my example, if your income is too high by $10K rather than $2K, then of course it is not cost-effective to try to qualify for the subsidy - you just bite the bullet and pay back the $2500).
āJust got my notice in the mail from my 2017 health insurance provider. Should I choose the same plan, it will be up 142% next year!ā
For those reading along, due to @āCardinal Fangā starting this thread and posting here, Iām really not too panicked. As I currently have a silver plan and I know my state has chosen to take the path of many states in applying increases due to the current administrationās refusal to fund cost sharing reductions for 2018 into the silver plans only, I know the sharp increase in the quote I received for next year reflects that. Iāll just shop around a pick another plan as they try to monkey around with it. My state will have options and those receiving subsidies will see their subsidies increase to cover some of the hole. Thanks for sharing all the great info, @āCardinal Fangā and clearly laying out info for those effected by the political gaming.
āust figure out what your tax credit it and either waive the advance payments (pay as you go) ā or be prepared to pay it back in 2019 if necessary. There is no penalty - just paying back money you were given as an advance tax credit ā so it still comes down to a pay now vs. pay later determination. I realize that cash flow can be a problem, but if so you can take the subsidy, but track how much you are getting, and then in October-January when your cash flow improves, bank the money you might need to pay back.ā
I believe you can also opt for somewhere in the middle and only take a partial subsidy in advance if you are worried about cash flow but want to play it safe.
Yes, you can adjust subsidy level to whatever seems comfortable. Iāve done that myself ā based on last yearās income my fully subsidized policy for 2018 would have a monthly premium of about $145. Iām also self-employed, but without wild swings in income --nonetheless, it can easily vary up or down by several thousand dollars each year. So I reduced my subsidy and nudged my monthly premium up about $30 month to around $175 just to provide some wiggle room. Still a huge bargain for me (I was paying more like $375 in 2017) thanks to the whole CSR surcharge on silver ā but less likely to find myself owing extra when I file taxes in 2019.
I wish my kid one in AZ could get a policy that was $175 a month. At his income level of bout $42,000, he pays bout $300 a month. And that is with a subsidy.
I wish my one kid were earning $42K or anything close to it.
Get your kid on Medicaid, then you donāt have to worry! (Sorry, couldnāt resist.)
Well, the $175 is because Iāve got Bronze and so I get the full benefit of the CSR surcharge on the Silver Thatās the gift that Trump has given me ā so the federal government wonāt pay Blue Shield and Kaiser money to support the CSRās on poorer people, they are going to pay me that money instead. I bank the difference and put it in an HSA, and I pay 100% of health care costs out of pocket (or from the HSA) until I hit my deductible, with the exception of preventive services. I just had a mammogram (free) and they called me back to get a better quality image (no longer free) and Iāll probably end up paying a $500 bill over nothing. So itās not as if I am getting freebie stuff - Iām just making the choice to save the premiums and live with the higher deductible.
But if your son is paying $300 a month on an income level of $42K, he is a lot better off than I was in the 90ās and all the years my kids were in college. I was a single mom with an income in the $30K range, and between me and my kids I was paying a lot more in insurance premium dollars all along. Thatās a manageable amount on that income.
I remember shopping online for insurance in NY the year my daughter was graduating, before ACA, and there was absolutely nothing available except a state subsidized program for lower income earners where the lowest cost policies would have been around $375. That was in 2010. Fortunately my daughter got hired for a job with employer-provided health care so I didnāt have to pay (I would have helped her out at that point) ā but again, thatās the private market.
Noname, there are definitions based on IRS, you file 8962 with your taxes, but a different mindset applies to ACA input, different particular practices.
When your D is a student and job hunting, it can make sense to include her on your policy. As Fang said, you carefully explore your options. As calmom said, you run the math to understand what impacts you and how, whatās best. (I canāt speak to self employed income aspects.)
If putting her on your exchange plan while sheās poor and clearly a dependent (per IRS rules,) your ACA household income is yours and hers. Two people, both incomes.
Since youāre worried, weāre assuming the expected job is lucrative. So when she gets that job, she stops being a dependent. Now itās just you - one person, one income. You call and drop her, readjust input numbers and as calmom says, at that point, you review your own plan options.
Later, the 1095a will show month by month how this tracked for 2018. Say she starts a job and has coverage as of August 1. The 1095a will show both of you through July. Aug-Dec, just you. You will use that to compete the 8962.
IRS. When you file 2018, since sheās evolved and no longer a dependent, you donāt include her as a dependent on your taxes. She files her own.
I donāt remember if D2 and I each got a 1095a or I got one and it was copied for her taxes.
Although your taxes, in general, are based on annual totals. the 8962 confirms insurance details month by month.
In a vanilla situation, if the exchange calculates your discounts at $XXX, and you take that discount each month, all this should work out. If your income fluctuates wildly, calmom is the source.
āI just had a mammogram (free) and they called me back to get a better quality image (no longer free) and Iāll probably end up paying a $500 bill over nothing.ā
Irritating that you/insurer eat the cost of someone not getting a clear image to begin with. That is bad.
My gal checks basic clarity before I leave. When I was called back, it was for a different intentional level of clarity, a better look see at an area.
On top of the cost issues, all this is ridiculously confusing. Iāve said before, if itās this challenging for us, imagine the blocks for less analytical folks.
You want to check as much as you can, try to anticipate.
For those who have gotten called back for a more detailed mammo, hereās hoping the worst problem is how to pay for it.
Really basic question here for you patient and helpful people.
I am not on an Exchange plan now but would like to start filling in the numbers that would allow me to see how much the subsidy will be. Where would I go to perform those calculations or do I need to wait until the āsystemā opens on November 1st?
Am guessing that I should run 2017 earnings through last yearās TurboTax so that I have income figures. Any other groundwork?
I have been reading along and my head is spinning, but all of these detailed explanations are so very helpful, so thank you!
@CT1417 1417 You could try running 2017 numbers through the 2017 system and see if you might qualify and rerun it after 11/1. Where to go and when depends on where you live. Looks like CAās state system is up already. Maybe some others, too.
Try going here first and see what it says for your state:
https://www.healthcare.gov/lower-costs/
This calculator will tell you how much your subsidy would have been for 2017: https://www.healthcare.gov/lower-costs/qualifying-for-lower-costs/
It will be bigger in 2018, but premiums will also be bigger. If you were buying the 2nd cheapest Silver plan, it would cost you the same in 2017 and 2018.
CF, my mammogram was normal and I knew it would beā¦ but not certain enough to forego the followup. But I had the first report & knew what the problem was and looked stuff up, which basically said there was a 95% chance I was fine. And I was (and am).
Plus Iāve been through the whole mammo call back thing before. It happens. I think it should still be covered under āpreventiveāā¦ but I checked, it isnāt, and Iām not going to debate the insurance company over it.
My main point is simply that its silly for anyone to be envious of my low premium which is the product of a choice I made to go with a high deductible plan.
I didnāt want to criticize. I just wish good health for you, and all of us. Hearing about having to go back for a second mammo can be alarming even though second mammos usually show the woman is fine.
Glad all is good, @calmom !
It certainly can be nerve-wracking for many people, but my thought processes tend toward denial rather than panic. The bigger worry for me is that Iām the type of person who might not go to the doctor when I should because Iām more inclined to take a āwait and seeā approach.