Are you given your entire IEP to enroll in Medicare when on an ACA plan? Someone with a large subsidy, eligible for Medicare next month. I want to make sure they don't have a tax penalty. From past exp I feel like they do not penalize the first month for some reason, since you are not 65 *yet* but do in all subsequent months, but I have nothing that actually documents that.
ACA/Medicare IEP
- Thread starter Cdevin
- Start date
Officially, they lose eligibility for the APTC whenever Part A becomes effective. If they want to stretch out ACA as long as possible, then they should enroll at the end of their IEP. See p. 38 on this pdf.
https://www.cms.gov/marketplace/technical-assistance-resources/medicare-and-marketplace.pdf
https://www.cms.gov/marketplace/technical-assistance-resources/medicare-and-marketplace.pdf
- Thread starter
- #3
Thanks for that. But A is going to be retroactive. I guess that is my question. October bday wants to stay on aca as long as possible also reached moop already and is paying basically nothing. So if they signed up in December their A would be 10/1. So if I read it right they could owe 3 months in subsidies.
That is correct . From 10/1 on they owe the subsidies back . And the irs will eventually detect they have Medicare and aca and claw that back .
From IRS Publication 974:
"Example 1. Ellen was enrolled in a qualified health plan with APTC. She turned 65 on June 3 and became eligible for Medicare. Ellen must apply to Medicare to receive benefits. She applied to Medicare in September and was eligible to receive Medicare benefits beginning on December 1. Ellen completed the requirements necessary to receive Medicare benefits by September 30 (the last day of the third full calendar month after the event that established her eligibility, turning 65). She was eligible for Medicare coverage on December 1, the first day of the first full month that she could receive benefits. Thus, Ellen can get the PTC for her coverage in the qualified health plan for January through November. Beginning in December, Ellen cannot get the PTC for her coverage in the qualified health plan because she is eligible for Medicare.
Retroactive coverage.
If APTC is being paid for coverage in a qualified health plan and you become eligible for government coverage that is effective retroactively, you will not retroactively lose the PTC for your coverage."
Source: [EXTERNAL LINK] - Publication 974 (2022), Premium Tax Credit (PTC) | Internal Revenue Service
"Example 1. Ellen was enrolled in a qualified health plan with APTC. She turned 65 on June 3 and became eligible for Medicare. Ellen must apply to Medicare to receive benefits. She applied to Medicare in September and was eligible to receive Medicare benefits beginning on December 1. Ellen completed the requirements necessary to receive Medicare benefits by September 30 (the last day of the third full calendar month after the event that established her eligibility, turning 65). She was eligible for Medicare coverage on December 1, the first day of the first full month that she could receive benefits. Thus, Ellen can get the PTC for her coverage in the qualified health plan for January through November. Beginning in December, Ellen cannot get the PTC for her coverage in the qualified health plan because she is eligible for Medicare.
Retroactive coverage.
If APTC is being paid for coverage in a qualified health plan and you become eligible for government coverage that is effective retroactively, you will not retroactively lose the PTC for your coverage."
Source: [EXTERNAL LINK] - Publication 974 (2022), Premium Tax Credit (PTC) | Internal Revenue Service
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Interesting I didn’t know that . So somebody on an awesome aca subsidized plan can wait 3 months to get there A and b( they applied in the 3 month window after there birthdate month ) . Their Medicare becomes effective on the next month ( used to be 2 months after if you waited till the 3rd month after ). So basically they can get 4 months of sudsidies after they turn 65 with no clawback .
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