ACA Penalty Exemptions Unaffordable?

[unzuetay]

Is using the healthcare.gov tool for figuring health care premiums accurate for figuring 8% of household income?

I'm concerned because it's giving me figures saying a single person can get insurance for $42 monthly premiums. This doesn't sounds plausible in real life to me.

Any references would be appreciated. Thank you!

[Gretel]

If you are poor enough you might not have to pay anything after the subsidy. Unless a client brings in the actual numbers from having gone to the Market Place a year ago, we will not know how accurate these calculations are. I have the same doubts with the one I use (Penguin). Since this is all I have this is what I am going to use. What else would the IRS have?

[DonB]

I'm concerned because it's giving me figures saying a single person can get insurance for $42 monthly premiums. This doesn't sounds plausible in real life to me.

Any references would be appreciated. Thank you!

This is most likely a net premium after the Premium Tax Credit.

[arlo]

unaffordabe exemption

You want to use the premium not the net. Healthcare.gov give you a place to get the Silver and Bronze which only gives the premium. I think I am telling you right
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[Gretel]

I respectfully disagree.

[David1980]

You want to use the premium not the net. Healthcare.gov give you a place to get the Silver and Bronze which only gives the premium. I think I am telling you right
+++++++++++++++++++++++++

There's a worksheet in the 8965 instructions page 11 for calculating the 8% based off marketplace. http://www.irs.gov/pub/irs-pdf/i8965.pdf

Effectively, if they fall under 400% of federal poverty level and didn't have the option to purchase through an employer they'll never qualify for that exemption, due to the subsidy reducing the cost below 8% (I haven't seen anyone give an example that would qualify in that scenario at least.)

The exemption could come into play if there was an option to purchase employer coverage and that coverage was more than 8%. Or if they were over 400% of poverty level.

[BP.]

You want to use the premium not the net.

Instructions for form 8965, p. 9, I think there are a few mentions to subtract the subsidy from the premium.

[TaxGuyBill]

For the 8% exemption for somebody that is not eligible for employer insurance, you start with the FULL cost of the Bronze plan, and through the calculations, you subtract the hypothetical Premium Tax Credit (which is based on the Silver plan). If the end result is over 8%, they are exempt.


When you look up the Bronze plan, you only include the family that is NOT eligible for employer insurance or eligible for another exemption..

When you look up the Silver plan, you only include the family that is NOT eligible for Minimum Essential Coverage or eligible for another exemption. That includes employer insurance, Medicaid, Veterans insurance, etc..


If the entire non-tobacco-using family is included in the Bronze and Silver plan 'look ups', I agree that if they are between 100% and 400% of the FPL, I doubt if anybody would qualify for the 8% exemption.

However, some situations can change that. (1) Tobacco use. That will increase the cost of the Bronze plan, but does not affect the Premium Tax Credit (based on the Silver). That COULD make it "unaffordable". (2) PART of the family is eligible for employer insurance, Medicaid, or other Minimum Essential Coverage. All of those would reduce or eliminate the Premium Tax Credit, and COULD cause the it to be "unaffordable".