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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.

Big Income Change?

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Question: We're a household of 3, husband at 55, wife at 46 & son at 14. My husband is quitting his job by the end of Sept 2015. YTD income at that point is $250K+ but the last quarter will be zero. Because he's starting something on his own, he will have zero income in the coming year or so while starting something from scratch. We probably opt out of using COBRA (too expensive). Here are my questions: 1. Given we have high income for 3/4 of the year but zero for the last 1/4, will we qualify for Cvered CA? If not, any other option? 2. If we can apply for the last 1/4 of the year for Covered CA, will we get premium assistance now that we are at zero income level? 3. For next year 2016, my husband will continue having zero income while I will try to get "part-time" job. Do we need to report any new income in mid-year once I find a part-time job? Basically, how it works when our income change during the year? Thanks for your advise in advance.

Answer: When your employer-based health plan terminates - let's say September 30, 2015 - you can sign up for individual health insurance through Covered California even though you will not be eligible for a subsidy in 2015. Then, sometime before December 15th, you will adjust your household income at Covered California to estimate your 2016 income. If that estimate falls within the premium assistance range ($28K to $80K for a 3-person household), you can receive a subsidy to help pay your premium until your income is once again beyond subsidy range. Your 2016 estimate does not have to be accurate, any excess subsidy you may receive will be returned when you pay your 2016 taxes and vice versa. In this case, you could really use a good agent to help you with the application process and subsequent changes as proper timing is key to maximizing your benefits and avoiding any gaps in coverage, not to mention a potential nightmare of governmental proportions if you do things incorrectly.

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