Will She Have to Pay ACA Penalty for these Lapses in Coverage

Discussion in 'Health Care Reform Forum' started by yogooglethis, Jul 22, 2017.

  1. yogooglethis
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    yogooglethis Well-Known Member

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    losing EGHP 8/30/17 and T65 stsrting medicare in march 2018.She does have a cobra option but wants to save buy getting a STM.

    if she does cobra for month of September and then goes the last 3 months of 2017 without ACA coverage then no penalty right?

    she would only be going January and February 2018 without ACA so no penalty there right?

    would you advise her to keep the cobra for 2017 just to be safe?
     
  2. Yagents
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    Yagents Well-Known Member

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    I think it's 2 months and 29 days. Must be insured 1 day in month 3.

    Penalty may be smaller than cobra payment.

    Many exemptions she may be eligible for.

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    Typically you have to buy cobra for two months or work out alternative payment.
     
  3. MBSC
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    MBSC Well-Known Member

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    She may qualify for another type of penalty exemption. A popular exemption is if the cheapest Bronze plan is more than 8.16% (2017) MAGI.

    List of exemptions: https://www.irs.gov/instructions/i8965/ch01.html

     
    Last edited: Jul 22, 2017
  4. Yagents
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    Yagents Well-Known Member

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    Better to take cobra for 5 months and leverage 30 grace in Feb.

    STM plus penalty plus no pre ex might not be worth extra $500
     
    Last edited: Jul 22, 2017
  5. taterpeeler
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    taterpeeler Well-Known Member

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    she would only be going January and February 2018 without ACA so no penalty there right?

    Your kidding right? You don't know this? Lord help
     
  6. Ann H
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    Ann H Well-Known Member

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    The "short gap" exemption is for LESS THAN 3 months. So, essentially you could go 2 months without coverage and have no penalty. However, it is contiguous. Your example is a 5 month gap which starts in October and goes through February, even though it is in 2 different calendar years. That would not qualify for the short-gap exemption.

    It would be better to look for a different exemption. The unaffordability exemption is often the easiest one to qualify for.
     
  7. junkman
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    junkman Well-Known Member

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    Does the lowest available premium have to be >= 8.25% of MAGI? That's what sticks in my mind. Not really sure where that number came from. Or was it a silver plan? Crap, stuff running together since not paid to know.
     
  8. kgmom219
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    kgmom219 Well-Known Member

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    Uggghhhhh....

    1. Y is correct (as usual). The penalty kicks in at 2 months, 29 days of CONTINUOUS no coverage.

    2. Based on the above, she is going to pay for 4 months of penalty in 2017 or pay for 2 month of COBRA or go with an Individual plan. Even if its for 2 months, she won't pay the penalty. Here's a link to the calculator: Individual Shared Responsibility Provision - Payment Estimator

    Use that to determine the actual cost of the penalty plus the STM premium. It will also determine if she can get out of the penalty based on income.

    3. She can go uncovered in 2018 with no penalty, because of her 3/1 Medicare date.

    Tater is also right, but I really hate adding to his ego. ;)

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    Its really 8.13 for 2017.

    Or be like me and if you know its close, use the IRS calculator :)
     
  9. Ann H
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    Ann H Well-Known Member

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    I agree with KGMom, Yagents, and Peeler. However, I have a problem with the "2 months and 29 days" theory. The law actually says LESS THAN 3 MONTHS. That is important, even in Febrary with 28 or 29 days.

    Form the marketplace is this document that says, "A “short gap” means you were uninsured for a period of less than three consecutive months during the year. Note that if you have coverage for even one day of a month, you’re considered to have had coverage for that full month. For example, if you lacked coverage from March 2 until June 15, but had coverage directly before and after that, you’re considered covered for March and June, and had a coverage gap of two months – April and May – so you would qualify for the short coverage gap exemption. "
    https://marketplace.cms.gov/technical-assistance-resources/exemption-gap-in-health-coverage.pdf

    Basically, I just remember the following:

    * - A CONTIGUOUS gap
    * - of LESS THAN 3 months
    * - which is your FIRST gap in a year
     
    Last edited: Jul 31, 2017
  10. Yagents
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    Yagents Well-Known Member

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    I really really think it's 8.16% for 2017 :biggrin:
     
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