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Reply to Will She Have to Pay ACA Penalty for these Lapses in Coverage     
Old 07-22-2017, 03:21 PM   #1
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Will She Have to Pay ACA Penalty for these Lapses in Coverage Will She Have to Pay ACA Penalty for these Lapses in Coverage
losing EGHP 8/30/17 and T65 stsrting medicare in march 2018.She does have a cobra option but wants to save buy getting a STM.

if she does cobra for month of September and then goes the last 3 months of 2017 without ACA coverage then no penalty right?

she would only be going January and February 2018 without ACA so no penalty there right?

would you advise her to keep the cobra for 2017 just to be safe?
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Old 07-22-2017, 04:42 PM   #2
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Will She Have to Pay ACA Penalty for these Lapses in Coverage
I think it's 2 months and 29 days. Must be insured 1 day in month 3.

Penalty may be smaller than cobra payment.

Many exemptions she may be eligible for.

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Typically you have to buy cobra for two months or work out alternative payment.
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  Reply With Quote to Will She Have to Pay ACA Penalty for these Lapses in Coverage
Old 07-22-2017, 04:46 PM   #3
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Will She Have to Pay ACA Penalty for these Lapses in Coverage Re: Will She Have to Pay ACA Penalty for these Lapses in Coverage
She may qualify for another type of penalty exemption. A popular exemption is if the cheapest Bronze plan is more than 8.16% (2017) MAGI.

List of exemptions: https://www.irs.gov/instructions/i8965/ch01.html

How to claim an exemption for a short gap in coverage

Anyone with a gap in health coverage of no more than 2 consecutive months can claim this exemption.

You’re considered covered any month you had minimum essential coverage for even 1 day. Example: You didn’t have coverage from March 2 to June 15. Your coverage gap was 2 months – April and May. You qualify for the exemption.

If your gap was 3 months or more, you can’t claim this exemption for any of those months. Example: You didn’t have coverage any day in April, May, or June. You can’t claim this exemption for any of those months.

If your coverage gap crosses calendar years, the months without coverage of the second tax year aren’t counted for the exemption for the first tax year. But the uncovered months from the first year are counted for the exemption for the second tax year.

Example: Let’s say you didn’t have qualifying coverage November 2014, December 2014, and January 2015. You’re eligible for the short gap exemption for 2014. But for the 2015 tax year, you’re not eligible for the short gap exemption for January 2015 because you didn’t have coverage for three consecutive months – from November 2014 through January 2015.

Reference: https://www.healthcare.gov/exemption...ails/short-gap

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Last edited by MBSC; 07-22-2017 at 05:00 PM.
  Reply With Quote to Will She Have to Pay ACA Penalty for these Lapses in Coverage
Old 07-22-2017, 05:00 PM   #4
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Will She Have to Pay ACA Penalty for these Lapses in Coverage
Better to take cobra for 5 months and leverage 30 grace in Feb.

STM plus penalty plus no pre ex might not be worth extra $500
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Last edited by Yagents; 07-22-2017 at 05:16 PM.
  Reply With Quote to Will She Have to Pay ACA Penalty for these Lapses in Coverage
Old 07-22-2017, 08:44 PM   #5
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taterpeeler on Will She Have to Pay ACA Penalty for these Lapses in Coverage
 
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Will She Have to Pay ACA Penalty for these Lapses in Coverage Re: Will She Have to Pay ACA Penalty for these Lapses in Coverage
she would only be going January and February 2018 without ACA so no penalty there right?

Your kidding right? You don't know this? Lord help
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Old 07-29-2017, 10:30 PM   #6
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Ann H on Will She Have to Pay ACA Penalty for these Lapses in Coverage
 
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Will She Have to Pay ACA Penalty for these Lapses in Coverage Re: Will She Have to Pay ACA Penalty for these Lapses in Coverage
Originally Posted by yogooglethis View Post
losing EGHP 8/30/17 and T65 stsrting medicare in march 2018.She does have a cobra option but wants to save buy getting a STM.

if she does cobra for month of September and then goes the last 3 months of 2017 without ACA coverage then no penalty right?

she would only be going January and February 2018 without ACA so no penalty there right?

would you advise her to keep the cobra for 2017 just to be safe?
The "short gap" exemption is for LESS THAN 3 months. So, essentially you could go 2 months without coverage and have no penalty. However, it is contiguous. Your example is a 5 month gap which starts in October and goes through February, even though it is in 2 different calendar years. That would not qualify for the short-gap exemption.

It would be better to look for a different exemption. The unaffordability exemption is often the easiest one to qualify for.

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Disclaimer: Hey! I'm not a tax adviser or lawyer! Yes, I'm married to an Accountant, but would you ride in a plane flown by the wife of a pilot? No! So what I say may be somewhat educated, but take it with a grain of salt and ask a true tax adviser or lawyer.
  Reply With Quote to Will She Have to Pay ACA Penalty for these Lapses in Coverage
Old 07-30-2017, 05:46 PM   #7
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Will She Have to Pay ACA Penalty for these Lapses in Coverage Re: Will She Have to Pay ACA Penalty for these Lapses in Coverage
Originally Posted by Ann H View Post
It would be better to look for a different exemption. The unaffordability exemption is often the easiest one to qualify for.
Does the lowest available premium have to be >= 8.25% of MAGI? That's what sticks in my mind. Not really sure where that number came from. Or was it a silver plan? Crap, stuff running together since not paid to know.
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Old 07-31-2017, 12:34 PM   #8
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kgmom219 on Will She Have to Pay ACA Penalty for these Lapses in Coverage
 
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Will She Have to Pay ACA Penalty for these Lapses in Coverage Re: Will She Have to Pay ACA Penalty for these Lapses in Coverage
Uggghhhhh....

1. Y is correct (as usual). The penalty kicks in at 2 months, 29 days of CONTINUOUS no coverage.

2. Based on the above, she is going to pay for 4 months of penalty in 2017 or pay for 2 month of COBRA or go with an Individual plan. Even if its for 2 months, she won't pay the penalty. Here's a link to the calculator: Individual Shared Responsibility Provision - Payment Estimator

Use that to determine the actual cost of the penalty plus the STM premium. It will also determine if she can get out of the penalty based on income.

3. She can go uncovered in 2018 with no penalty, because of her 3/1 Medicare date.

Tater is also right, but I really hate adding to his ego.

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Originally Posted by junkman View Post
Does the lowest available premium have to be >= 8.25% of MAGI? That's what sticks in my mind. Not really sure where that number came from. Or was it a silver plan? Crap, stuff running together since not paid to know.
Its really 8.13 for 2017.

Or be like me and if you know its close, use the IRS calculator

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Good things don't come to those who wait. They come to those who work their butts off and never give up.
  Reply With Quote to Will She Have to Pay ACA Penalty for these Lapses in Coverage
Old 07-31-2017, 02:23 PM   #9
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Ann H on Will She Have to Pay ACA Penalty for these Lapses in Coverage
 
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Will She Have to Pay ACA Penalty for these Lapses in Coverage Re: Will She Have to Pay ACA Penalty for these Lapses in Coverage
I agree with KGMom, Yagents, and Peeler. However, I have a problem with the "2 months and 29 days" theory. The law actually says LESS THAN 3 MONTHS. That is important, even in Febrary with 28 or 29 days.

Form the marketplace is this document that says, "A “short gap” means you were uninsured for a period of less than three consecutive months during the year. Note that if you have coverage for even one day of a month, you’re considered to have had coverage for that full month. For example, if you lacked coverage from March 2 until June 15, but had coverage directly before and after that, you’re considered covered for March and June, and had a coverage gap of two months – April and May – so you would qualify for the short coverage gap exemption. "
https://marketplace.cms.gov/technica...h-coverage.pdf

Basically, I just remember the following:

* - A CONTIGUOUS gap
* - of LESS THAN 3 months
* - which is your FIRST gap in a year

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Disclaimer: Hey! I'm not a tax adviser or lawyer! Yes, I'm married to an Accountant, but would you ride in a plane flown by the wife of a pilot? No! So what I say may be somewhat educated, but take it with a grain of salt and ask a true tax adviser or lawyer.

Last edited by Ann H; 07-31-2017 at 02:47 PM.
  Reply With Quote to Will She Have to Pay ACA Penalty for these Lapses in Coverage
Old 07-31-2017, 03:54 PM   #10
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Will She Have to Pay ACA Penalty for these Lapses in Coverage Re: Will She Have to Pay ACA Penalty for these Lapses in Coverage
I really really think it's 8.16% for 2017
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