My COBRA will expire 8/31/18 and I will then be eligible for ACA.
My household size is 1, I'm 60 years old, let's assume my income is $47,000, and that 4x the poverty level for my county and household size is $47,001.
1) What income is used for calculating ACA subsidies? Is it AGI? 2) How is income calculated for part-year eligibility? 3) Is it true that my subsidy is equal to the cost of the second-cheapest silver plan available in my zip code, less 9.5% of my income?1) There are two subsidy calculations; the amount of the advanced subsidy, and the subsidy used to determine the credit or additional payment on your 2018 tax return.
Both use a modified AGI, but the first doesn't allow you to include (legitimate) estimates of ALL the factors that go into AGI. In addition, you can elect a smaller advanced subsidy than the calculations provide for.
2) The AGI and "affordable amount" are calculated on an annual basis, and prorated for the months you have insurance from the exchange. 3) More-or-less correct. The 9.5% is accurate if your AGI is just below the 400% limit. In general (putting on my mathematics hat), the percentage of AGI considered "affordable" is a piecewise linear function of the ratio of AGI to the poverty line. I believe it is 8% at 300% and 9.5% at 400%. (end hat). If your AGI is over 400% of the poverty line, there is no subsidy and you have to repay the entire advanced subsidy.-- Arthur Rubin, CRTP, AFSP, Brea, CA
So regardless of when the income is earned, it's pro-rated linearly across the year?
That does seem like the only sensible way to do it, but I wanted to check.
Fortunately, the bulk of my income comes from realized capital gains and Roth conversions, so it's very controllable. However I'm going to wait until well after 12/31/18 to make my IRA contributions, just in case.
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