This is barely on-topic, but I've can't find any information/ confirmation on whether the health premium subsidies that are part of the new health-reform law are only income based or also based on a wealth/asset test? I've read that there will be a subsidy for costs over 10% of income, but what if someone has 2M in the bank earning 40K interest income (no other income)? Does she get the same subsidy as someone with zero net worth earning 40K? This question is critial to clients interested in/planning for early retirement (before Medicare is available). If there is no asset test this can make a big difference in whether someone can retire early or not.
Health Care Reform Tax Credit Subsidy Means Test?
Sep 13, 2010
4 Replies
I may be sticking my neck out here, but I doubt there would be any net-worth test. The auditing for compliance would be nearly impossible for something impacting so many. Most people can't even tell you their net worth. I'm (almost) certain the criteria will be based on details that can be culled from one's tax return. Joe
The "this fall to 2014" Insurance exchange thing requires that you be without health insurance for 6 months before you can join.
Don't retire early until all of the rules are in place and understood.
Well they did a net-worth test for expatriation, section 877A, where if your net worth greater than about 2 million you have to pay tax as if you sold all your assets.
This is a one-time thing essentially an exit tax for those leaving the country and/or renouncing citizenship. It would be much more of a PITA to do this yearly for the reform subsidy.
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