Couple calls in. They aren't my ACA clients, they are agency clients on another product. They are 63 and 62 drawing SSI, IRA, consulting firm. They made $60,000 in 2017 (got subsidy). For 2018 they chose a low-deductible silver plan, with subsidy they pay like $700 a month. Hubby's side business doing well. They estimate $80,000 (he earned a huge one-time chunk this year) after all deductions. I told them to talk to an accountant but they say no way they can get 2018 below 400% of FPL at this point between SS and what they have already earned/taken out of IRA. They already talked to an accountant, he sent them to me! They are literally getting like $3000 a month in subsidy, something like that. Their plan is $3700 without subsidy.
What are their options?
I don't think that they can switch to a cheaper plan at this point, the way I understand it is that the SEP for income change is only valid if it will change plans available to you . Does going from 390% FPL subsidy eligible to 400%+ not-subsidy eligible (on the high end) allow you to change plans in an SEP?
I told them they could try their luck with the marketplace on switching, but that wasn't something I could help them with or guarantee. Cheapest bronze is still $16k for the rest of the year and they are paying Uncle Sam back the $12k in subsidy. Plus the wife's meds another $500-750 a month.
If they can't change plans, can they:
1. Cancel the insurance outright effective end of April and still have to pay back $12k subsidy they got so far this year. Take out short term or go Christian healthshare for hubby (wife won't qualify for either, will be uninsured and paying $500-750 oop a month for meds). Exempt from tax penalty.
2. Report income change and keep it without subsidy for the rest of the year, so pay $29,000 MORE the rest of the year and still have to pay $12k to Uncle Sam.
3. Don't report increase in income and have to pay Uncle Sam $36,000 in APTC back next year. (Is that number FOT REAL?????) (not recommended)
4. ????
What other options haven't I thought of? Am I looking at this correctly? The numbers are mind-boggling.
What are their options?
I don't think that they can switch to a cheaper plan at this point, the way I understand it is that the SEP for income change is only valid if it will change plans available to you . Does going from 390% FPL subsidy eligible to 400%+ not-subsidy eligible (on the high end) allow you to change plans in an SEP?
I told them they could try their luck with the marketplace on switching, but that wasn't something I could help them with or guarantee. Cheapest bronze is still $16k for the rest of the year and they are paying Uncle Sam back the $12k in subsidy. Plus the wife's meds another $500-750 a month.
If they can't change plans, can they:
1. Cancel the insurance outright effective end of April and still have to pay back $12k subsidy they got so far this year. Take out short term or go Christian healthshare for hubby (wife won't qualify for either, will be uninsured and paying $500-750 oop a month for meds). Exempt from tax penalty.
2. Report income change and keep it without subsidy for the rest of the year, so pay $29,000 MORE the rest of the year and still have to pay $12k to Uncle Sam.
3. Don't report increase in income and have to pay Uncle Sam $36,000 in APTC back next year. (Is that number FOT REAL?????) (not recommended)
4. ????
What other options haven't I thought of? Am I looking at this correctly? The numbers are mind-boggling.