ObamaCare Info

[johde]

Age doesn't matter as much when your under 400% poverty level

But if your over 50 and over 400% you still in the bad camp.

You realize that over 40 age group till retirement are normally you highest earning years of your life.

Wonder what this is going to do to peoples ability to save for retirement?

For certain demographics is could increase retirement savings. The MAGI used for ACA purposes is basically AGI from the front of the tax form with a couple of items like tax exempt interest and social security benefits added back. So, IRA, 401K, HSA contributions and the like reduce your income and increase your subsidies.

 

[Robbi]

For certain demographics is could increase retirement savings. The MAGI used for ACA purposes is basically AGI from the front of the tax form with a couple of items like tax exempt interest and social security benefits added back. So, IRA, 401K, HSA contributions and the like reduce your income and increase your subsidies.

You mean the demagraphics who are young enough to think they'll live forever and not plan or those with 9 toes in the ground and know it's useless to start planning. Of course with so many workers haveing their hours cut, there will be a lot less people earning enough to put money aside to save.

 

[lauradis]

For certain demographics is could increase retirement savings. The MAGI used for ACA purposes is basically AGI from the front of the tax form with a couple of items like tax exempt interest and social security benefits added back. So, IRA, 401K, HSA contributions and the like reduce your income and increase your subsidies.

Just starting to think of what people are going to give up to afford ACA.

Some one had said retirement, because we have ss in place.

Maybe but they have limits on what you can save thats tax deductible think ira are around 5k each 401 was 17k something.

This wouldn't help people that get health insurance for work.

I really see them saving less because of the the new increase hopefully they shift some of the retirement savings to HSA accts. But that will be short lived because if your in the im going to live forever phase of your life, you don't need to save and your never getting old.

 

[johde]

You mean the demagraphics who are young enough to think they'll live forever and not plan or those with 9 toes in the ground and know it's useless to start planning. Of course with so many workers haveing their hours cut, there will be a lot less people earning enough to put money aside to save.

If you would have noticed we were talking about the over 40 "peak earning years" crowd.

For example, according to KFF the average 60 year old couple with MAGI of 400% of the poverty level ($62,040) get's a $7,800 take credit. Above that they get nothing.

If they make $71,000, they could put $9,000 into a combination of IRA's and HSA's to bring their income down to $62,000. Their Income tax before credits goes down by $1,350 and they qualify for the $7,800 tax credit. So, they put $9,000 in and get extra $9,150 back in your tax refund. The government basically gave you the money to fund your IRA.

Taking it to the extreme, the maximum IRA and HSA contributions limits for this groups is $20,550 assuming they have a HDHP (6,500 each into the IRA and $7,550 into the HSA because of the extra for being over 55). So, a couple earning $82,590 could put $20,550 into IRA's and HSA. Their tax before credits goes down $3,082 + the $7,800 credit equals $10,882 less in taxes. For every dollar they put in their getting over $.50 back. Since their over 59.5 they could withdrawal the IRA money at any time if there income situation changes.

 

[mikek]

For certain demographics is could increase retirement savings. The MAGI used for ACA purposes is basically AGI from the front of the tax form with a couple of items like tax exempt interest and social security benefits added back. So, IRA, 401K, HSA contributions and the like reduce your income and increase your subsidies.

thanks for the information. Maybe i CAN get a subsidy some years .... We save in my wifes 403(b) (which is akin to a 401k for government people) and we currently max out the HSA. I also do my best to find money for a sarsep (which i assume hits' the IRA type of line...). I wonder too if ACA lets me off 1/2 of the self employed tax too...

One problem is it seems plans marked as "HSA compatible" are much less prevalent than before. Which seems odd since the deductibles are all so high now, i'd think half the plans would get you an HSA. I wonder if it's that so many are HSA ready that they dont call it out anymore?

 

[j's m]

http://laborcenter.berkeley.edu/healthcare/MAGI_summary13.pdf

These are the allowable deductions, they include the deductible part of self-employment tax.

403(b) is pre-tax so it doesn't get deducted again.

 

[johde]

thanks for the information. Maybe i CAN get a subsidy some years .... We save in my wifes 403(b) (which is akin to a 401k for government people) and we currently max out the HSA. I also do my best to find money for a sarsep (which i assume hits' the IRA type of line...). I wonder too if ACA lets me off 1/2 of the self employed tax too...

One problem is it seems plans marked as "HSA compatible" are much less prevalent than before. Which seems odd since the deductibles are all so high now, i'd think half the plans would get you an HSA. I wonder if it's that so many are HSA ready that they dont call it out anymore?

According to my information it's basically line 37 on your tax form with only a couple of changes. http://laborcenter.berkeley.edu/healthcare/MAGI_summary13.pdf

I would agree that more plans should be HSA Compatible. But, I know quite a few of them include a few office visits before deductible ad that would kick them out.

 

[mikek]

http://laborcenter.berkeley.edu/healthcare/MAGI_summary13.pdf

These are the allowable deductions, they include the deductible part of self-employment tax.

thanks for the source

looks like if one is self employed and on the bubble then 'playing the game' right can get you a tax credit. Basically just get a platinum plan with and HSA so you knock some income away and then you can get yourself to the promised land.

Could be cases where you get an upgrade from silver to gold or gold to platinum for free from the government.

now i guess i need to learn how it works when you are self employed and your income fluctuates- how to they handle that... off to read some more...

 

[mikek]

...

I would agree that more plans should be HSA Compatible. But, I know quite a few of them include a few office visits before deductible ad that would kick them out.

another of the thousnands of unintended consequences

 

[Colleen27]

For certain demographics is could increase retirement savings. The MAGI used for ACA purposes is basically AGI from the front of the tax form with a couple of items like tax exempt interest and social security benefits added back. So, IRA, 401K, HSA contributions and the like reduce your income and increase your subsidies.

That's a strategy I'm already thinking about since the 200% FPL mark seems to be pretty pivotal in post-subsidy costs; it might be a good way to stay under that line in good years without shortchanging ourselves in the long run. We live comfortably at this point anyway so tucking away the extra in good years wouldn't hurt a bit, and though we're funding our IRAs we haven't yet been motivated enough to set up a solo 401(k) for DH's business. This might be the kick in the pants we needed to do so.

 

[mikek]

...We live comfortably at this point anyway so tucking away the extra in good years wouldn't hurt a bit, and though we're funding our IRAs we haven't yet been motivated enough to set up a solo 401(k) for DH's business. This might be the kick in the pants we needed to do so.

I'm no accountant nor am i a tax lawyer or a financial advisor or anything like that- lol.

But compare an individual 401k to a sep ira and talk to your accountant. One bonus of a sep is it's like an IRA so you dont need to make the payments till 4/15. So you can have your accountant figure out your taxes (or you do it) and calculate your MAGI/AGI and then if you are a few bucks too high you just toss more into the SEP. AGAIN NOT A CPA or anything- but i think an individual 401k you have to have figured out and funded by 12/31.

Both have downsides/upsides when you grow bigger and need to add employees.

good luck.

 

[mikek]

talked to my broker today and their explanation of the reason why small business plans are not grandfathered is basically that it's too complex for the insurance companies. Basically if a business with plan X decided that it was going to contribute a lessor amount towards the plan and make their employees pay more then the plan would not be grandfathered. So the insurer would have no way of knowing on their end if it's appropriate fora plan to be grandfathered or not.

At least that's what I took away, they weren't exactly explaining it simply, and i also got the gist that they didn't understand it 100% either. Said every small business plan in NJ was cancelled and the insurers are 'taking the opportunity to rewrite everything to be compliant with the new regulations' . Also sounded like they are beholden to the exchanges somehow and they too were having just as hard a time getting on the website. So that didn't sound great.

 

[j's m]

talked to my broker today and their explanation of the reason why small business plans are not grandfathered is basically that it's too complex for the insurance companies. Basically if a business with plan X decided that it was going to contribute a lessor amount towards the plan and make their employees pay more then the plan would not be grandfathered. So the insurer would have no way of knowing on their end if it's appropriate fora plan to be grandfathered or not.

At least that's what I took away, they weren't exactly explaining it simply, and i also got the gist that they didn't understand it 100% either. Said every small business plan in NJ was cancelled and the insurers are 'taking the opportunity to rewrite everything to be compliant with the new regulations' . Also sounded like they are beholden to the exchanges somehow and they too were having just as hard a time getting on the website. So that didn't sound great.

At least you were able to speak to your broker, mine is off for a week. Last I spoke to her last week, she had no clue on the new plans. When she gets back Wednesday, you know our small group won't be high on her list of call backs.

 

[MinnieLovesMickey12]

I went to check plans and prices on medical and dental but all it shows is name of plan, percentage it pays, and premium. There is nothing to click on to read details about what the plans pay for, what the deductibles and co-pays are, etc.

I wanted to read up some details on what percentage the dental paid and limit per year etc. Nothing. I am not going to go through the process of actually signing up to read the details.

I don't need any insurance I have it. It is going up dramatically because of Obamacare but we get to keep it SO FAR. I was going to check into it for my grown son who will be required to buy in or pay a fine.

But there are no real details about any of the plans medical or dental.

 

[j's m]

Minnie, I found that by going to the actual insurance company website and filling out general questions, I could get information and real prices on the plans. I know both BCBS and Amerihealth had lots of information on the plans.

I was disappointed the exchange gave no real information unless you applied.

 

[mikek]

I went to check plans and prices on medical and dental but all it shows is name of plan, percentage it pays, and premium. There is nothing to click on to read details about what the plans pay for, what the deductibles and co-pays are, etc.

I wanted to read up some details on what percentage the dental paid and limit per year etc. Nothing. I am not going to go through the process of actually signing up to read the details.

I don't need any insurance I have it. It is going up dramatically because of Obamacare but we get to keep it SO FAR. I was going to check into it for my grown son who will be required to buy in or pay a fine.

But there are no real details about any of the plans medical or dental.

if there area few plans you have your eye on then it may be best to go to the actual insurance company website- they will typically give you all the facts with nothing more than your age, sec, and smoking status.

I'm 11 days in with hundreds of attempts to log in and can't get the app submitted yet since they are still trying to verify my existence.

I believe the dental plans are only for minor children- but NOT sure at all. so keep checking, but don't be disappointed.

 

[njcarita]

if there area few plans you have your eye on then it may be best to go to the actual insurance company website- they will typically give you all the facts with nothing more than your age, sec, and smoking status.

I'm 11 days in with hundreds of attempts to log in and can't get the app submitted yet since they are still trying to verify my existence.

I believe the dental plans are only for minor children- but NOT sure at all. so keep checking, but don't be disappointed.

havent been able to set up account in nj yet . but website showed about 30 plans with some POSs availbale.................not just epo

 

[Robbi]

Have y'all seen the Obamacare info from Macafee?
"Obamacare websites have "no safeguards" to protect Americans who enroll in the health insurance exchanges from hackers who will "empty your bank account," according to internet security pioneer John McAfee.

It's another reason we'll choose the penalty.

 

[LovinPooh]

Will the penalty just come out of your income tax return?

 

[Colleen27]

I'm no accountant nor am i a tax lawyer or a financial advisor or anything like that- lol.

But compare an individual 401k to a sep ira and talk to your accountant. One bonus of a sep is it's like an IRA so you dont need to make the payments till 4/15. So you can have your accountant figure out your taxes (or you do it) and calculate your MAGI/AGI and then if you are a few bucks too high you just toss more into the SEP. AGAIN NOT A CPA or anything- but i think an individual 401k you have to have figured out and funded by 12/31.

Both have downsides/upsides when you grow bigger and need to add employees.

good luck.

My understanding is that the SEP IRA is subject to the same contribution limits as traditional IRAs, and since we're already maxing that out it wouldn't be an advantage for us. I really do need to hire someone to handle the accounting end of things one of these days; I've been doing it myself but as time goes on things only get more complex and we're reaching the limit of my ability and interest in learning how to manage it all.

Have y'all seen the Obamacare info from Macafee?
"Obamacare websites have "no safeguards" to protect Americans who enroll in the health insurance exchanges from hackers who will "empty your bank account," according to internet security pioneer John McAfee.

It's another reason we'll choose the penalty.

I think that's a "consider the source" thing. While there's no disputing his pioneering role in internet security and virus protection, the man is also a bit of a whack-a-doo and comes off as rather paranoid these days. I have a very hard time believing that e-filing our taxes all these years is any less risky than registering on the Obamacare site.