ACA Assumptions

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dcop
Posts: 157
Joined: Fri Sep 08, 2017 6:06 pm

ACA Assumptions

Post by dcop » Sat Nov 16, 2019 5:32 pm

I'm signed up for ACA starting January 1, 2020. I'm 61 years old and retired. My COBRA ends this November 30th. I have a couple assumptions as follows:
  • If I get a United Health Care short term catastrophic plan just for this December it will in no way jeopardize my upcoming 2020 ACA plan.
  • Part of my income for 2020 will be ROTH withdrawals. I know it is not taxable but I'm also assuming it does not count as MAGI for ACA subsidy purpose.
Is my thinking accurate?

TIA

nalor511
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Re: ACA Assumptions

Post by nalor511 » Sat Nov 16, 2019 6:43 pm

I believe your assumptions are correct. If you want to verify, pretend (in whatever tax software you choose, TT, HRB, etc) that you did these things for 2018 (or 2019 when it comes out), and see if your assumptions worked out. It's really easy to put in a roth withdrawal and verify that it doesn't decrease aca subsidy.

J295
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Re: ACA Assumptions

Post by J295 » Sat Nov 16, 2019 6:46 pm

My understandings are the same as yours.

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MP123
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Re: ACA Assumptions

Post by MP123 » Sat Nov 16, 2019 10:32 pm

You might be able to get on the ACA plan in December since you have a qualifying life event (losing COBRA). I'm not sure if there's enough time to get it set up for December but maybe. If not the short term plan won't prevent you from getting the ACA plan for January.

Tax free Roth income doesn't count towards MAGI for ACA purposes but tax free muni bond income does.

Topic Author
dcop
Posts: 157
Joined: Fri Sep 08, 2017 6:06 pm

Re: ACA Assumptions

Post by dcop » Tue Nov 19, 2019 8:57 pm

MP123 wrote:
Sat Nov 16, 2019 10:32 pm
You might be able to get on the ACA plan in December since you have a qualifying life event (losing COBRA). I'm not sure if there's enough time to get it set up for December but maybe. If not the short term plan won't prevent you from getting the ACA plan for January.

Tax free Roth income doesn't count towards MAGI for ACA purposes but tax free muni bond income does.
Thanx MP123 for confirming. I'm avoiding ACA for December 2019 because my income will be higher for 2019 do to the fact I'm taking more this year so I can have less MAGI in 2020. So with no subsidy for December 2019 my premium for one month would be $800 versus 250 for a Catastrophic plan.

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