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Covered California Q&A

Covered California and Obamacare related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the Covered California and Obamacare knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.


April 2015 Archives


Question: I wish to open a health savings account with $5500 from a retirement fund. If I use pretax funds (which are fully tax deductible), must I report this as income to Covered CA, because if I must, then I would most certainly exceed the threshold for a subsidy. My actual question is this: Would I have to repay the entire subsidy for the year or only from the point at which my income exceeded the threshold (that is, December 2015, the month I intend to open the HSA)?

Answer: Your plan won't fly. You can only open a health savings account (HSA) if you have a HSA qualified high-deductible health plan. That would be a Covered California plan labeled "Bronze 60 HSA". If you do not already have such a plan, you will not be able to change for one until 1/1/16. Secondly, if you take a $5,500 withdrawal from a qualified retirement account, the income will be reflected in your AGI and, whether or not you report it to Covered California, the IRS will adjust your tax due to reflect the added income and some of your premium tax credits will have to be repaid. If your AGI is above the subsidy threshold (400% FPL), then you would repay all of the subsidy you received.


Question: I am under a Covered California Policy and turn 65 in August. Can I still keep my Covered California policy (and contribute to my HSA) for three months past my 65th birthday? Reason, I have reached my Deductible and Out of Pocket Maximum due to an unplanned surgery. Medicare allows me to enroll 3 months past my 65th birthday.

Answer: No. You cannot keep your Covered California coverage once you are eligible for Medicare - the month you turn 65 - even if you were to delay your Medicare enrollment. Also, you cannot make contributions to a Health Savings Account after age 65.


Question: I am self employed. after my adjustments for self employment and ira contribution, my agi is $18500. But, after that I take deductions for my real estate taxes and mortgage interest, and standard deduction, I am in a very low income tax bracket. Which figure should I use? the AGI or after real estate taxes mtg interest and standard deduction.

Answer: For most of us, MAGI is the same as AGI - Adjusted Gross Income found on line 37 of the 1040. But more precisely, MAGI is the adjusted gross income plus any amounts excluded from taxation by section 911 (the exclusion from gross income for citizens or residents living abroad), any tax-exempt interest received or accrued during the tax year, and any portion of the taxpayer's social security benefits that are excluded from gross income.


Do I Use 2014 Income?

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Question: Next week I will be leaving my current job which provides health insurance. I am curious if covered california uses our income from 2014 to determine which plan we are eligible for or if they use an estimate for this year? I am returning to school and will make about 20,000.00 less than last year so I am a bit concerned?

Answer: When you apply for Covered California coverage use an estimate of your income for 2015.


Question: Is my income based on what I would make in a year if I hadn't lost my job or do I prorate the number for the year? Example. I was making $60,000/year. I got laid off at the end of April. do I prorate the number to $15,000 because that is what I will make if i don't get another job this year.

Answer: If you did not receive another penny in taxable income for the rest of 2015, the amount you already earned - $15,000 in your example - would be your projected annual income. If you are eligible for unemployment income, estimate what you could collect for the rest of the year and add it to the income already earned for your 2015 estimate. If you were to get a job at some point, that income would be added to your annual projection. Any significant income change, such as you described, makes you eligible for a Special Enrollment Period (SEP) during which you can re-enroll and qualify for either Medi-Cal or Covered California coverage with premium assistance.


Question: I received my 1095-a from CoveredCA back in January and noticed that it was not accurate. It showed policy dates of 4/1 to 10/1 with subsides for said months. The problem is that it included a subsidy for the 10th month when in fact it should not have. I filed my dispute over 60 days ago... I never heard from them. That said, I have been calling and have been told that they see the error and that the IT department needs to change the end date to the last day of 9th month. I've not been given a time frame with any certainty as to when this will happen. I have been told that the corrected 1095-a can't be issued until it does. So... my question is: Is there anyway I can get this resolved quicker? Is there a way for me to contact a rep that can actually get it fixed?

Answer: Your don't need a corrected copy of the Form 1095-A to file your federal tax return. The Premium Tax Credit form used as part of your federal tax filing is the IRS Form 8962.pdf You know the correct amounts for total premium and premium tax credits from your monthly health insurance bill. Enter those amounts on the Form 8962 and get on with it.

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