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Obamacare Glitch Could Make Coverage Unaffordable For Low-Wage Workers
- Thread starter Liz
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Don't forget that the 9.5% is not of gross income, it's MAGI of the household. "Modified Adjusted Gross Income", which is the adjusted gross income off of one's tax return, modified by removing certain deductions and sources of income. Generally, MAGI is higher, especially for students and sole-props.
Eligibility is for an individual, not a household. Because of this, a significant question was raised:
Is PPACA's "affordable" 9.5% benchmark set on total household income with MAGI adjustments reflecting the primary individual's expense, or the total household expense? If it's deductions for the primary only, MAGI may be a few thousand dollars higher than expected, which would result in lower subsidies.
Eligibility is for an individual, not a household. Because of this, a significant question was raised:
Is PPACA's "affordable" 9.5% benchmark set on total household income with MAGI adjustments reflecting the primary individual's expense, or the total household expense? If it's deductions for the primary only, MAGI may be a few thousand dollars higher than expected, which would result in lower subsidies.
I had a nice chart in PDF format that shows the subsidy by number of family members and another section where "affordable" was defined.
As I recall the 9.5% only applies to folks on the upper end of the income chain while lower income defines affordable as 2% of MAGI.
Of course I can't find that chart now. I believe someone on the forum linked to it but can't swear by that.
Found it.
Doc, not PDF
As I recall the 9.5% only applies to folks on the upper end of the income chain while lower income defines affordable as 2% of MAGI.
Of course I can't find that chart now. I believe someone on the forum linked to it but can't swear by that.
Found it.
Doc, not PDF
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News flash!! Can you believe these numbers? Who would have thunk it?
Gallup Poll: Obamacare Is Costing Americans Jobs | The Weekly Standard
More than 40 percent of small-business owners say that Obamacare has caused them to freeze hiring, while nearly a fifth say that it has caused them to cut existing workers. According to the poll, 41 percent of small-business owners have frozen hiring, while 19 percent have "reduced the number of employees [they] have in [their] business as a specific result of the Affordable Care Act
Fully three-eighths (38 percent) of small-business owners said that, because of Obamacare, they "have pulled back on their plans to grow their business."
In addition to these results, 18 percent of small-business owners say they have already cut their workers' hours back to part-time levels in anticipation of Obamacare's effects. Moreover, 24 percent "are weighing whether to drop insurance coverage."
Gallup Poll: Obamacare Is Costing Americans Jobs | The Weekly Standard
More than 40 percent of small-business owners say that Obamacare has caused them to freeze hiring, while nearly a fifth say that it has caused them to cut existing workers. According to the poll, 41 percent of small-business owners have frozen hiring, while 19 percent have "reduced the number of employees [they] have in [their] business as a specific result of the Affordable Care Act
Fully three-eighths (38 percent) of small-business owners said that, because of Obamacare, they "have pulled back on their plans to grow their business."
In addition to these results, 18 percent of small-business owners say they have already cut their workers' hours back to part-time levels in anticipation of Obamacare's effects. Moreover, 24 percent "are weighing whether to drop insurance coverage."
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It's 9.5% of that employee's W-2 wages. So if the amount the employer wants to charge is over this and the employee apply's on the exchange then the household income come's into play to figure the subsidy. BTW we were told not to figure the subsidy by any of these calculators but let it ride out thru the app process, because so many agencies were involved.
Well I should have added we initially were told the way you understand it Ray, so who know's at this point. I suppose we'll learn that in the certification or not.
Well I should have added we initially were told the way you understand it Ray, so who know's at this point. I suppose we'll learn that in the certification or not.
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They use MAGI for the whole household, not just for one individual in the household, even if only one individual is applying for subsidized insurance.
Also for premium subsidies, "MAGI" is AGI, with income added back for social security benefits (including the non-taxable portion and the Part B premium), certain tax-exempt interest and foreign income.
Ann,
What you say is what makes sense, and what I assume to be true, but I have a gut feeling it may not prove to be 100% accurate. I'm sure something in there will be non-standard.
@Somarco, Great info. Reminds me of this chart, which really puts the subsidy and "affordable" claim into perspective.
Sorry it's so big, I don't know how to re-size it.
What you say is what makes sense, and what I assume to be true, but I have a gut feeling it may not prove to be 100% accurate. I'm sure something in there will be non-standard.
@Somarco, Great info. Reminds me of this chart, which really puts the subsidy and "affordable" claim into perspective.
Sorry it's so big, I don't know how to re-size it.
Thanks, Bob. Yes, it was my chart, but all I did was put on one page what you can find on the internet on 2 pages.
Note that the FPL is for 2013, but we will be using 2014 FPL amounts when those are released.
Note also that the member's share of the premium is shown in bands for simplicity sake, when actually it is an incremental increase at every level of income from 100% to 400%.
