Help with ACA Proof of Income

[Sugarcubesea]

This is what I fear the most about retirement. I hope to work till age 65 and then retire. From what I have read is Medicare does a two year look back. My age 63 income will be used for Age 65 premium. I will have to monitor the IRMAA tables and see what the income cap is at that snapshot. I sure hope I can use my HSA as that is the whole reason I choose that coverage vs the other choices all these years. I currently have 17K in mine as my company just put their annual $2K contribution into the account. This HSA is part of my retirement planning and I will be very unhappy if I can not use it...

Maryanne, I'm so sorry for all you have gone thru...ugh I would be a wreck if I had to go thru all of that...

 

[Timeshare Von]

Double check and look into private insurance that is ACA compliant rather than buying on the Exchange. We were on an Exchange policy 2014 - 2018 (with 3 different insurance companies over the five years!). In 2019 we learned our company from 2018 also had open market policies, identical to the Exchange ones . . . and for less money!!!

That's where we've been for 2019 and this year in 2020. I'm happy to be rid of the Exchange nonsense.

FYI - we were no eligible for the "low income" reduction on the Exchange, but we do still get the full deduction for our premiums on the Schedule A as part of our medical deductions.

 

[Brett]

The thing is this works if you did this the year BEFORE you applied for ACA. But if you are applying the first year you will be living on unearned income, you don't have proof, except last years interest and dividends, which could still be much different the year you are applying for.

yes, I submitted online a copy of a spreadsheet of my IRA withdrawals. From what I remember I never gave them any "proof", just a spreadsheet of expected income

 

[Panina]

As some are having no problems and others are having problems, my guess it is the luck of the draw, who is handling your application.

 

[bogey21]

that said, a person could simply buy a policy privately, avoiding exchange hassles completely. I would have gone that route but those were more expensive than exchange plans.

For years I have been providing health insurance for my 51 year old Son who lives with his Mother (my ex-wife). He essentially has no income thus can't qualify for the ACA and Medicaid IMO is a disaster in the state in which he lives. For almost 10 years I have covered him with one 6 month Short Term Policy after another at a monthly cost of around $200 per month. Last year his State Legislature decided that you could not replace a maturing Short Term Plan with another without a 2 month gap in coverage so this year I insured him through Blue Cross/Blue Shield at a cost of $514.27 per month...

Your might ask why I do this? Number One is I can, and Number Two is if something really serious happened and he had no Insurance, everyone would look to me to come flying to the rescue. And yes, I thoroughly understood the main risk of Short Term Plans (they are non-renewable which brings Pre-Existing Conditions into play) and was willing to accept this risk. Trump changed to rules to allow Short Term Policies to be written for one year terms with two one year renewals allowed. The Insurance Companies didn't like this and prevailed on the Legislature in his State to implement 6 month maturity limits with the mandatory 2 month break in coverage. They won and I lost costing me over $300 per month...

George

 

[klpca]

This is what I fear the most about retirement. I hope to work till age 65 and then retire. From what I have read is Medicare does a two year look back. My age 63 income will be used for Age 65 premium. I will have to monitor the IRMAA tables and see what the income cap is at that snapshot. I sure hope I can use my HSA as that is the whole reason I choose that coverage vs the other choices all these years. I currently have 17K in mine as my company just put their annual $2K contribution into the account. This HSA is part of my retirement planning and I will be very unhappy if I can not use it...

Maryanne, I'm so sorry for all you have gone thru...ugh I would be a wreck if I had to go thru all of that...

We had been planning to use our HSA for Cobra premiums. Our plan is to save up our HSA contributions to pay for our insurance premiums for the gap between my husband's retirement date and being eligible for medicare. Our plan is to have my husband retire at 63.5 at the earliest, and cobra for ~18 months (looks like these premiums will qualify). I will only be 62 when he is 65 so I need insurance for another 3 years. I think (not sure if I am understanding the Cobra rules correctly) that when my husband is eligible for medicare that is a qualifying event that will make me eligible for another 18 months of Cobra (seems too good to be true). What I am unsure of is if we can still use the remaining HSA funds for those premiums.

By the way, here is the IRS publication that I found: https://www.irs.gov/publications/p969#en_US_2018_publink1000204086

And here are the rules for the HSA distributions being used for insurance premiums:
Insurance premiums.
You can’t treat insurance premiums as qualified medical expenses unless the premiums are for:
1. Long-term care insurance.
2. Health care continuation coverage (such as coverage under COBRA).
3. Health care coverage while receiving unemployment compensation under federal or state law.
4. Medicare and other health care coverage if you were 65 or older (other than premiums for a Medicare supplemental policy, such as Medigap).

The premiums for long-term care insurance (item (1)) that you can treat as qualified medical expenses are subject to limits based on age and are adjusted annually. See Limit on long-term care premiums you can deduct in the instructions for Schedule A (Form 1040).

Items (2) and (3) can be for your spouse or a dependent meeting the requirement for that type of coverage. For item (4), if you, the account beneficiary, aren’t 65 or older, Medicare premiums for coverage of your spouse or a dependent (who is 65 or older) generally aren’t qualified medical expenses.

@WinniWoman , I hope that you are able to get to the bottom of this problem. Try to not let it overwhelm you. There are unfortunately a lot of connected rules and regulations that seem to fight each other. Someone who does this frequently, a financial planner maybe, may know them pretty well. Maybe you could arrange to consult with someone. It would be worth the money to know the correct answer. Or maybe someone on Bogleheads has already gone through this. Those folks are pretty savvy. Here's a thread that I found. Maybe it could help you? https://www.bogleheads.org/forum/viewtopic.php?t=265892

 

[WinniWoman]

We had been planning to use our HSA for Cobra premiums. Our plan is to save up our HSA contributions to pay for our insurance premiums for the gap between my husband's retirement date and being eligible for medicare. Our plan is to have my husband retire at 63.5 at the earliest, and cobra for ~18 months (looks like these premiums will qualify). I will only be 62 when he is 65 so I need insurance for another 3 years. I think (not sure if I am understanding the Cobra rules correctly) that when my husband is eligible for medicare that is a qualifying event that will make me eligible for another 18 months of Cobra (seems too good to be true). What I am unsure of is if we can still use the remaining HSA funds for those premiums.

By the way, here is the IRS publication that I found: https://www.irs.gov/publications/p969#en_US_2018_publink1000204086

And here are the rules for the HSA distributions being used for insurance premiums:
Insurance premiums.
You can’t treat insurance premiums as qualified medical expenses unless the premiums are for:
1. Long-term care insurance.
2. Health care continuation coverage (such as coverage under COBRA).
3. Health care coverage while receiving unemployment compensation under federal or state law.
4. Medicare and other health care coverage if you were 65 or older (other than premiums for a Medicare supplemental policy, such as Medigap).

The premiums for long-term care insurance (item (1)) that you can treat as qualified medical expenses are subject to limits based on age and are adjusted annually. See Limit on long-term care premiums you can deduct in the instructions for Schedule A (Form 1040).

Items (2) and (3) can be for your spouse or a dependent meeting the requirement for that type of coverage. For item (4), if you, the account beneficiary, aren’t 65 or older, Medicare premiums for coverage of your spouse or a dependent (who is 65 or older) generally aren’t qualified medical expenses.

@WinniWoman , I hope that you are able to get to the bottom of this problem. Try to not let it overwhelm you. There are unfortunately a lot of connected rules and regulations that seem to fight each other. Someone who does this frequently, a financial planner maybe, may know them pretty well. Maybe you could arrange to consult with someone. It would be worth the money to know the correct answer. Or maybe someone on Bogleheads has already gone through this. Those folks are pretty savvy. Here's a thread that I found. Maybe it could help you? https://www.bogleheads.org/forum/viewtopic.php?t=265892

You can definitely take Cobra premiums out of an HSA. Also, the IRS states Cobra ( and similar continuation of coverage). I consider my retiree medical to be that and I used the HSA funds to pay those premiums. It is the exact same plan we had when my husband was employed and what the Cobra is with an almost identical premium by just a few bucks more per month. I called the HSA account manager and also the employer and no one could give me an answer. They referred me to the IRS documents, which I already read. Then they suggested I call the IRS. Forget it! Imagine that phone call! I’m doing what I want. Worse comes to worse- my husband is 65 and can take the money out for anything without a penalty, though would owe taxes on non medical use things.

My ACA premiums I know I cannot take out of there so at some point hopefully I can get through to a normal person who can change out my credit card. If not- come and arrest me what can I say?

So now we know- you can take Parts A, B, C and D from an HSA account and Cobra and similar continuation of coverage, but not ACA or most other medical insurance premiums, with a few rare exceptions, and not Medigap supplement premiums.

It’s all a bunch of you know what....

 

[wilma]

So I started writing a letter and was having an anxiety attack just thinking of the BS I will have to go through. (I will add that after going through hell back in NY with mine and my husband's Medicare and knowing that I would have to do it all over again, my worst nightmare came true this week. I literally- no exaggeration- was on the phone for 4 1/2 hours for my husband's Medigap plan and Part D plan for NH! Any other person would have given up or just went along with what the reps were saying. But I am persistent and I knew better and stayed the course- though more of my hair has fallen out. Long story but I prevailed. But this is a whole 'nother story. Just awful. No one knows what the heck they are doing and it is because of the convoluted health care system we have and the over reliance of computer systems that don't allow for real life deviations).

New Hampshire lost it's funding for ACA Navigators, but somehow I tracked down a person who USED to be a Navigator. She works at the local low income medical clinic right here. When I called her she immediately set up a 3 way conference call with this guy at healthapplys.com. He called me later on when he got home and he essentially is a broker and he attached himself to my application. He then asked me a bunch of questions and said he was going to write a letter for me and send it off. He said they probably won't even look at it until April because it is technically not due until May.

I am worried that they will come back asking for more documentation of something that has not even occurred yet, but he said for now he will just send the letter and see what happens. He seemed to know what they are looking for-hopefully. My head was exploding looking at my 2018 tax returns and paperwork for this year's taxes which I have not filed yet as I do not even have our brokerage statement yet (it comes in March and I am having a CPA do them this year because I am on overload).

I just can't handle anything else. I am so sick of this - back to no life and wasting entire days on this stuff. Does it ever end?! UGH!

He even said I might not even hear anything. But he said that if they do not accept the letter or any document they might request, they could increase my premiums to $900 per month! That is almost double what my retiree medical insurance is!

Or. of course, they could cancel the insurance altogether.

If they cancel my insurance down the road I can go back on the retiree medical. I am not sure if they raise my premiums if I can just go back on the retiree medical. OMG. I really cannot take it.

Retiree medical is paid up until 3/1 and that is when the ACA plan kicks in. On 3/2 , I have to call my retiree plan- the employer, actually- and put the retiree medical on hold. I hope I am not making a big mistake.

This is why I did not want to go through this, but my FA insisted I give it a go. I really can't take the stress and worry any longer.What geekette went through I could see happening. Even my husband's plans- I sent forms they needed for power of atty- spent a lot on postage- and - no where to be found. SMH.....Still waiting for the fun.....

Who are these retirees that say being retired is like a vacation? I haven't experienced that yet. Everyday it is more health insurance bs and phone calls and stupidity. I can't seem to shake it from my life! What do the stupid people do?

i would recommend doing some fun things every day to relieve some of your stress. You are retired and moved in to your new home, so take a break and do something you enjoy, get out of the house. And perhaps you can ask your husband for some help on the medicare stuff, you seem overwhelmed and could use a hand.

 

[Panina]

i would recommend doing some fun things every day to relieve some of your stress. You are retired and moved in to your new home, so take a break and do something you enjoy, get out of the house. And perhaps you can ask your husband for some help on the medicare stuff, you seem overwhelmed and could use a hand.

I doubt she will venture out much as she want this all dealt with ASAP, but at home a cup of tea or coffee, a few minutes of meditation, watch a program that will make you smile, call or write someone to feel better, etc are few minute breaks that can help.

I believe asking her husband is not a great option for medical stuff, like it isn't for me. Mine doesn’t have a clue on insurance, doesn’t want to have a clue and if it is to be done right I need to handle it. If he does, it gets messed up and I have to fix it. My other helps in many other areas as does hers. Basically two halves make a whole.

 

[WinniWoman]

So I have been enjoying our home as we are working on it and getting settled. But now back to a business week I still have this nagging feeling inside me that is zapping me of joy regarding this darn health insurance stuff.

Starting March 1st I am enrolled in the ACA plan, BUT they need that documentation. I somehow found myself a broker who deals with the marketplace through an ex NH navigator (NH lost it's funding for navigators). The broker wrote a letter of explanation on my behalf. No documents provided as of right now. He said they probably won;t even look at it until April.

The problem is by that time I would have put my retiree medical insurance on suspend (have to do that 3/2) and if they deny me and decide I am not entitiled to subsidies (which I am- but dealing with the bureaucracy is a nightmare, as geekette explained) then I would NOT be able to go back onto the retiree medical and the ACA plan premium would be double the retiree medical!!! In essence I would have "screwed myself"!

So I am losing sleep over this. It would be one thing if I could keep the retiree medical active by paying the premiums until the government decided I am eligible for the subsidies, but I do not know if that is allowed. (I had to apply for the ACA plan now because you only have 60 days from the date of your move to apply, so the most I could do is change the enrollment date to 4/1 instead of 3/1- I suppose).

I have left a message for the broker and I am going to call our Financial Advisor about this again. This is what I was trying to avoid and why I was resistant to going on an ACA plan in the first place. Of course, a $40 per month premium with no deductible is very enticing compared with a $545 per month premium and a high deductible.

Yes- I am still stressed about this. I had enough stress dealing with my husband's Medicare plans and I want this all to be over with and not hanging over my head for months.

Thank you all for trying to assist.

 

[WinniWoman]

....He even said I might not even hear anything. But he said that if they do not accept the letter or any document they might request, they could increase my premiums to $900 per month! That is almost double what my retiree medical insurance is!

yes, my premiums are 875/mo, that is exactly why I am not buying insurance this year. Today I met with my oncologist and at check-in, I was chit chatting with the admin (the lady that runs the place in all but title). She seemed shocked by the 875, and it was 675 last year (no amount of sending in same paperwork repeatedly moved that needle). I asked, in fake fear, "this appointment isn't going to cost $900 is it? Dr Erin is worth it, but ..."

Nope. $70, pay at time of service. thank you, HSA.

So what happened then? They just denied you the subsidies and charged you $875 per month? What about the intial months' premiums when you "had" the subsidies? Did you have to pay back the difference?

I would do what you do- self pay- but I am concerned about catastrophic coverage.

 

[vacationhopeful]

I counted the MONTHS after the ACA came into being until I turned 65yo for Medicare. I feel YOUR pain.

AND personally HOPE the people who dream up these regulations have a "special place" for their last 5-10 years before age 65.

AND I always had paid for my individual health insurance since my last 'real' job ended in 1982.

 

[WinniWoman]

I counted the MONTHS after the ACA came into being until I turned 65yo for Medicare. I feel YOUR pain.

AND personally HOPE the people who dream up these regulations have a "special place" for their last 5-10 years before age 65.

AND I always had paid for my individual health insurance since my last 'real' job ended in 1982.

The people who dreamed up these regulations are government employees who don't have to deal with this as they have different health insurance from the rest of us from what I understand.

 

[paxsarah]

I recently had to submit documentation of income for our ACA plan this year (for a completely different reason that was fairly simple to document, so it's not a direct parallel) but I will say that it took less than a week after uploading the documents for the marketplace to notify me that the documents were verified and my issue was resolved. It was so, so, so much easier to deal with than with the state agency that basically flagged the same issue for my kids' CHIP coverage a couple months earlier. I'm not saying that it will necessarily be that simple for you, but that an income verification doesn't have to take months and be a huge hassle - just another data point (isn't the plural of anecdote, data, lol?).

 

[Brett]

I counted the MONTHS after the ACA came into being until I turned 65yo for Medicare. I feel YOUR pain.

AND personally HOPE the people who dream up these regulations have a "special place" for their last 5-10 years before age 65.

AND I always had paid for my individual health insurance since my last 'real' job ended in 1982.

a lot of people under 65 dream of the socialist paradise called Medicare !

 

[Brett]

The people who dreamed up these regulations are government employees who don't have to deal with this as they have different health insurance from the rest of us from what I understand.

Your understanding may be incorrect
but the rich are different from you and me

 

[VacationForever]

So I have been enjoying our home as we are working on it and getting settled. But now back to a business week I still have this nagging feeling inside me that is zapping me of joy regarding this darn health insurance stuff.

Starting March 1st I am enrolled in the ACA plan, BUT they need that documentation. I somehow found myself a broker who deals with the marketplace through an ex NH navigator (NH lost it's funding for navigators). The broker wrote a letter of explanation on my behalf. No documents provided as of right now. He said they probably won;t even look at it until April.

The problem is by that time I would have put my retiree medical insurance on suspend (have to do that 3/2) and if they deny me and decide I am not entitiled to subsidies (which I am- but dealing with the bureaucracy is a nightmare, as geekette explained) then I would NOT be able to go back onto the retiree medical and the ACA plan premium would be double the retiree medical!!! In essence I would have "screwed myself"!

So I am losing sleep over this. It would be one thing if I could keep the retiree medical active by paying the premiums until the government decided I am eligible for the subsidies, but I do not know if that is allowed. (I had to apply for the ACA plan now because you only have 60 days from the date of your move to apply, so the most I could do is change the enrollment date to 4/1 instead of 3/1- I suppose).

I have left a message for the broker and I am going to call our Financial Advisor about this again. This is what I was trying to avoid and why I was resistant to going on an ACA plan in the first place. Of course, a $40 per month premium with no deductible is very enticing compared with a $545 per month premium and a high deductible.

Yes- I am still stressed about this. I had enough stress dealing with my husband's Medicare plans and I want this all to be over with and not hanging over my head for months.

Thank you all for trying to assist.

Why not submit the documents which I indicate in my earlier post together with the letter in the first place? This will avoid any back and forth communication where they will most likely ask for supporting documents anyway.

 

[WinniWoman]

Why not submit the documents which I indicate in my earlier post together with the letter in the first place? This will avoid any back and forth communication where they will most likely ask for supporting documents anyway.

The broker said he is just submitting the letter of explanation first. Supposedly he has experience with these things. Don't know why he did not want to submit the 1099's.

 

[Luanne]

This is what I fear the most about retirement. I hope to work till age 65 and then retire. From what I have read is Medicare does a two year look back. My age 63 income will be used for Age 65 premium. I will have to monitor the IRMAA tables and see what the income cap is at that snapshot. I sure hope I can use my HSA as that is the whole reason I choose that coverage vs the other choices all these years. I currently have 17K in mine as my company just put their annual $2K contribution into the account. This HSA is part of my retirement planning and I will be very unhappy if I can not use it...

Maryanne, I'm so sorry for all you have gone thru...ugh I would be a wreck if I had to go thru all of that...

They do use a two year lookback. But when my dh retired and went immediately to Medicare he was able to go in and show them he was no longer working. That reduced his Medicare premium.

 

[WinniWoman]

I suppose if worse comes to worse and they take away the subsidies, I could just lay out the high premiums until we reconcile our taxes for 2020 in 2021 as someone else suggested, and then we would get the excess money we laid out for the premiums back then. By that time - April/May 2021- in June 2021, I will be on Medicare.

Why my financial planner did not suggest this I don't get it as the plan is to keep our income low enough in the first place to qualify. And why the broker has not returned my phone call today I don't know.

I did call Ambetter/ACA plan and they did receive the uploaded letter on 2/13 and it is under review. I also was able to set up an online account and I was able to call to change my credit card from the HSA one to a standard credit, since it is a "no no" to pay ACA premiums out of an HSA account. That will stink if I end up having to pay the higher premiums as I have been using the HSA to pay the retiree medical ones. I would then have to dip into our savings accounts to pay the high ACA premiums. UGH!

I have taken all of our insurance premiums off autopay for now as I am going bonkers with it all and will wait for things to settle down and know all is in place before I go that route.

Hoping to hear something positive about the ACA plan soon so I can rest my brain a bit.

 

[VacationForever]

The broker said he is just submitting the letter fo explanation first. Supposedly he has experience with these things. Don't know why he did not want to submit the 1099's.

I would not submit 1099. 1099 is useless. What you need is the last paycheck/termination documentation.

 

[bogey21]

I will have to monitor the IRMAA tables and see what the income cap is at that snapshot.

I have no desire to get down into the weeds with this IRMAA stuff. The only time I see it is when I get the annual breakdown of my Social Security Payment. I see the IRMAA penalties for Parts B and D, shake my head. I tell myself I must be fortunate or I wouldn't have to be paying them. Then I move on and enjoy life. I see no need to clutter my mind with things I can't control...

George

 

[WinniWoman]

I would not submit 1099. 1099 is useless. What you need is the last paycheck/termination documentation.

The broker did not return my call today. I have a copy of the last pay stub, but how does that show low income for 2020?
We have no termination documentation that I can find. All was done via phone.

Wouldn't the 1099's show the interest income and also my inherited IRA RMD to show an example of what we will be living on this year?

 

[Brett]

I have no desire to get down into the weeds with this IRMAA stuff. The only time I see it is when I get the annual breakdown of my Social Security Payment. I see the IRMAA penalties for Parts B and D, shake my head. I tell myself I must be fortunate or I wouldn't have to be paying them. Then I move on and enjoy life. I see no need to clutter my mind with things I can't control...

George

true, earn less than $85,000 and you don't have to worry about the IRMAA stuff

 

[VacationForever]

The broker did not return my call today. I have a copy of the last pay stub, but how does that show low income for 2020?
We have no termination documentation that I can find. All was done via phone.

Wouldn't the 1099's show the interest income and also my inherited IRA RMD to show an example of what we will be living on this year?

1099 for interest income yes... I kept thinking that you were referring to W2 - my bad. Yes... and also IRA RMD will be needed. For employment, there must be something to show the past date worked. You can use your resignation letter for instance and presumably your husband also has his when he retired.