Costs & Taxes

The Affordable Care Act (ObamaCare) bans insurers from denying coverage or charging more for coverage for preexisting conditions like epilepsy.

Death benefits received from life insurance are typically non-taxable and thus won’t impact the household MAGI ObamaCare’s subsidies are based on.

If you have an income above 400% of the Federal Poverty Level then you can’t get cost assistance, but can buy a plan on ObamaCare’s Marketplace.

When you project your income for ObamaCare’s cost assistance you need to attest to the amount of income you expect to claim and whether or not you plan to file taxes.

If you are a US citizen you can get covered using ObamaCare’s health insurance exchange when you move to the US and cancel your plan when you leave. You’ll simply use special enrollment to enroll.

Student loan debt isn’t tax deductible, health insurance cost assistance is based on total household income and isn’t affected by loan debt.

Your HSA contribution lowers your AGI and MAGI qualifying you for more cost assistance (assuming you stay within 100% – 400% of the Federal Poverty Level.)

Qualified withdrawals from a Roth IRA don’t count toward modified adjusted gross income (MAGI) for ObamaCare, but taxable IRA withdrawals do. Withdrawals of your original contributions are never taxable income (as you already paid taxes on them), therefore taking them back out doesn’t affect your MAGI.

When you get tax credits you get them based on projected total income after deductions for the year (technically Modified Adjusted Gross Income or MAGI).

If projected dips below 100% of the Federal Poverty Level and that is reported to the Marketplace then you can lose your tax credits. The same thing happens if you have over 400% FPL.

Even states that didn’t expand Medicaid or set up a Marketplace were set to have a tax on high-end health plans. That said, this tax has been pushed back many times and it may never end up being implemented.

Getting married or divorced can affect tax credits based on filing status. Use Premium Tax Credit Form 8962 alternative calculation for year of marriage. This can help you adjust tax credits and ensure you avoid repaying extra credits or missing out on claiming additional ones.

The penalty for not having coverage is based on your “tax family” and “coverage family”. Those who file together must all have coverage, get exemptions, or pay the fee based on household income.

ObamaCare’s tax credits are based on annual household income (filers MAGI plus dependents AGI). MAGI includes non-taxable disability payments.

If you get a tax credit in advance, and then make more income then projected or marry and thus claim more income you may have to repay based on annual income.

When someone is on a family plan, but is out of the US and turn 26 they can use the physical presence test to see if they need to get coverage or can wait until they come back.

There is no surcharge for health insurance under ObamaCare. Employer plans work like they normally do, but one cannot get Marketplace cost assistance if they have an employer plan.

Tax credits are based on household income, when you get married mid-year you’ll count income before marriage and after marriage differently on the 8962 form Table 4. Alternative Calculation for Year of Marriage Eligibility.

Tax credits are based on annual income, not monthly income. This doesn’t do much to help people between jobs when income is low, but it’s important to understand to avoid repayments of tax credits. Repayment limits are based on annual household income too.

Tax credits are based on household income, anyone in the tax family can join a family plan (coverage family) and share tax credits. The problem here is that everyone is filing separately, but sharing a family plan.

To claim the exemption for being ineligible for Medicaid write code “G” in column “C” of the 8965 – health care exemptions form. You don’t need to apply for the exemption to the Marketplace with the rejection letter if you live in a state that rejected Medicaid (although you can do this to get a ECN and qualify for special enrollment).

Between there Marketplace and IRS there are over 20 different exemptions from the fee, some trigger special enrollment, others short exemptions, some full year.

Social Security benefits count toward household income or the purposes of tax credits, so if you claim more SS tax credits go down, claim less and they go up.

Many states rejected expanding Medicaid. This means those with low incomes are priced out of Marketplace cost assistance, but make too much for Medicaid.

Social Security Disability payments count as income for MAGI. Medicaid doesn’t count this income, but the Marketplace cost assistance does.