<p>CF, oddly, I can’t duplicate your numbers. I tried several zips. I started with parents 45 and since the son is 20, assumed both kids “20 and younger.” Just shows how we have to look at personal detail. </p>
<p>Household income, again, healthcare.gov: You and your spouse, if you are married and will file a joint tax return. Any dependents who make enough money to be required to file a tax return.</p>
<p>Yes, $800 is huge and can be devastating. So what if they have overdraft protection- it’s a hit they didn’t deserve, a crisis they shouldn’t have to manage. But am still wondering if this was a wide problem.</p>
<p>And-sorry for this, I am empathetic-but if the premium was $835… And I thought the pay-by was 12/23. This is just the sort of thing that sometimes makes me wonder about media reports.</p>
<p>The subsidy depends on the ages of the parents and kids and the family income, because it is based on the cost of the second-lowest Silver plan, which is bigger if the family is older. If their income is $90K, then the maximum they would have to pay is 9.5% of $90K, which is $8550/year or $712/month. Anything above that would be subsidized.</p>
<p>So we’ll put this family in Los Angeles, 90012. Using your numbers, ages of 45, 45, 19, 19, I see that the second lowest Silver plan is Blue Shield Standard Coinsurance, at $829 a month. They only have to pay $712 a month, so their subsidy would be $117 a month (all numbers rounded).</p>
<p>Now let’s make the family older. We’ll say they are 55, 55, 22 and 24. They still have the same income, so they still have the same maximum per month of $712 for a Silver. But now, that Silver costs $1288/month. So that older family gets a bigger subsidy of $575 a month.</p>
<p>Yes I get 8550. I now think you used a real site while I was using the KFF link. But the $117 (mine showed $138 off a higher full premium) doesn’t seem like much discount. Yours is more accurate I’d think. But we’re close enough.</p>
<p>It seems like actingmt’s neighbor needs look closely at the exact details of the family’s financial situation. Is the husband’s insurance in fact non-qualifying? If the premium is around $700/month just for him and the family has an income of around $90K, the insurance is hovering around the limit for being “affordable”. And if the family income is around $90K, then the family is hovering around the limit of qualifying for subsidies. The exact details matter here. </p>
<p>And this is a case where a judicious use of some retirement vehicle could be valuable, if sheltering a little bit of income would push the family under the limit for subsidies they otherwise wouldn’t qualify for.</p>
<p>“but the IRS seems to say they have to be dependents.”</p>
<p>I know we’ve gone over this before in the thread, but you do not have to claim adult child, under 26, as a dependent on your taxes to keep them on your insurance.</p>
<p>emilybee, do you know how the income of the adult child is treated? If the parents claim the non-dependent adult child, is the child’s income added in to the household income for subsidy purposes? I spent half an hour yesterday trying to figure that out, and failed.</p>
<p>You can give $14K per parent to the child, with no tax consequences. It’s not income, and it is not subject to gift tax. Any amount over $28K is subject to gift tax.</p>
<p>Based on calmom’s research I believe all incomes in the family including children need to be added to compute subsidy if they are part of the insurance. Children’s income is not relevant if they are not part of insurance.</p>
<p>However, both adult incomes are always relevant for subsidy calculations.</p>
<p>Okay, the dad has rejected the Medicaid plan for his kid so that’s not happening. They will probably buy the cheapest plans they can find for this year and worry about it seriously when the husband gets dumped into the exchange next year. Interestingly, the cancellation letter she got is dated 12/12 and requires a decision to pick a new plan by 12/15 including a Monday through Friday helpline. The letter came yesterday. Saturday. The husband is at work and will have to choose something tonight. Good grief.</p>
<p>Thanks, emilybee. I was pretty sure calmom had written about it, but going back 150 pages to search? Not so easy.</p>
<p>And the answer is: If the family wants to get insurance for the non-dependent adult child under 26, the adult child’s income has to be added in for subsidy calculation purposes. Which makes sense.</p>
<p>The mystery for me about actingmt’s neighbor’s insurance is: How is that legal? How does the insurance company get to cancel the plan and give the family one day to pick a new one? Was there some previous letter? The state insurance regulators can’t possibly allow companies to cancel plans with one day’s notice, can they?</p>
<p>CF - The letter also says if they do nothing they will be enrolled in the plan that the company thinks best matches their now cancelled plan. It says nothing about cost. It’s actually unbelievable but I saw the letter so it’s for real. And, now that son’s income counts it’s probably safe to say they are not getting subsidized. Thanks.</p>
<p>More - The letter references a state decision not to follow the suggestion to allow people to keep their non-compliant plans. It covers all of that and then states, “We recently learned…blah. blah, blah.”</p>
<p>The confusing part is, before the brouhaha about the non-compliant plans, the insurance company had cancelled that plan. Right? They had to, because it was non-compliant.</p>
<p>And then they couldn’t un-cancel the plan until their state allowed un-cancellation, which their state never did. So wasn’t this plan cancelled months ago?</p>
<p>It’s baffling that this is the first the family has heard about their plan being cancelled.</p>
<p>Another bug, this time in Covered California:</p>
<p>A friend wanted to sign up on Covered California, though the family is not eligible for subsidies. He is a naturalized citizen. The page asks for his seven-digit naturalization number. But he was naturalized when his parents became citizens, so his naturalization number starts with the letter A. No good, the webpage won’t accept it.</p>
<p>For this bug (but not all the others) I’m sympathetic to the programmers. There are so many tiny little exceptions and squiggly cases.</p>
<p>This may seem convoluted. you do not have to claim adult child, under 26, as a dependent on your taxes to keep them on your insurance.</p>
<p>I know Healthcare.gov says you are allowed you to keep them on your plan even if they are not financially dependent. </p>
<p>is the child’s income added in to the household income for subsidy purposes? </p>
<p>Healthcare.gov, re: income: You and your spouse, if you are married and will file a joint tax return. Any dependents who make enough money to be required to file a tax return.</p>
<p>But, if there really is no connection to the IRS definition of “dependent,” why didn’t the latter .gov statement simply say, “your children under 26…?” </p>
<p>Plus, at some point, including our kids who earn over x amount will throw off our costs/subsidies. If her employer doesn’t offer insurance, she’d have to get her own plan. Maybe, when the time comes, it will be a wash. It’s just nagging. I can let it be, for now.</p>