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SciTeacher98
Joined: 25 Mar 2010
Posts: 2
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 Posted: Fri Mar 26, 2010 9:44 am Post subject: Health Insurance Reform Benefits |
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It appears this reform will be beneficial to early retirees. As long as you don't extend beyond that ~$88,000 limit your health insurance should get a subsidy. Any thoughts or comments?
Secondly, I tried finding information about whether there will be any interaction between Cobra and the subsidy option. Will the reform require you to exhaust Cobra first (since it's a group you belong to, versus not having a group hence the subsidy option). Cobra would still be expensive, so the preferred cost would be the subsidy option.
Last question: If one were to retire in 2014 when the subsidy becomes available, any thoughts on whether they look at your full income from the prior year and say you're not entitled to a subsidy (income exceeded ~$88,000), or would they go by 2014 and the fact that your income is way less? |
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admin
Site Admin
Joined: 06 Feb 2004
Posts: 138
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| Posted: Fri Mar 26, 2010 1:55 pm Post subject: Re: Health Insurance Reform Benefits |
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| SciTeacher98 wrote: | It appears this reform will be beneficial to early retirees. As long as you don't extend beyond that ~$88,000 limit your health insurance should get a subsidy. Any thoughts or comments?
Secondly, I tried finding information about whether there will be any interaction between Cobra and the subsidy option. Will the reform require you to exhaust Cobra first (since it's a group you belong to, versus not having a group hence the subsidy option). Cobra would still be expensive, so the preferred cost would be the subsidy option.
Last question: If one were to retire in 2014 when the subsidy becomes available, any thoughts on whether they look at your full income from the prior year and say you're not entitled to a subsidy (income exceeded ~$88,000), or would they go by 2014 and the fact that your income is way less? |
It will probably be at least a year before the publish the rules on the parts of the reform that don't start until 2014. They don't even have the details on the measures that are supposed to go into effect immediately (i.e., children can stay on their parents health plan until age 26, no lifetime or annual limits on coverage, etc.)
I agree that in sum, the legislation should make it easier for a lot of people to retire.
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sgeeeee
Joined: 10 Feb 2004
Posts: 462
Location: Mesa, AZ
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| Posted: Fri Mar 26, 2010 9:44 pm Post subject: Re: Health Insurance Reform Benefits |
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| SciTeacher98 wrote: | | It appears this reform will be beneficial to early retirees. As long as you don't extend beyond that ~$88,000 limit your health insurance should get a subsidy. Any thoughts or comments? |
It looks like, if nothing else, it should provide some freedom to early retirees. I live in Arizona and have no group plan. I am paying for my own insurance and as long as I keep paying premiums, Arizona law says the insurance company can't drop me and can't price my premiums higher than the rest of the people in my age group. But if I move out of the state, I have to reapply for insurance. Anything that has happened to SGSpouse or I since we first got our Arizona policy becomes a pre-existing condition.
I'm hoping it also provides a subsidy to help even more.
| Quote: | | If one were to retire in 2014 when the subsidy becomes available, any thoughts on whether they look at your full income from the prior year and say you're not entitled to a subsidy (income exceeded ~$88,000), or would they go by 2014 and the fact that your income is way less? |
I'm not sure anyone knows yet, but I was listening to a discussion on NPR the other day and they indicated that IRS forms would be used to enforce much of the new law by asking questions about tax payers' current insurance. So it is conceivable that the insurance subsidy would be calculated based on your IRS filing for the year.
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SciTeacher98
Joined: 25 Mar 2010
Posts: 2
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| Posted: Wed Apr 28, 2010 7:57 pm Post subject: Health Care Reform Scenario |
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One follow up question for any speculation on how the following scenario may be handled.
If my wife and I plan on retiring in 2014 at 57 with one million dollars in our 401k's, and plan on withdrawing the recommended 4% giving us $40,000 annually to live on via the 72t (no other income), will we still qualify for a health insurance subsidy or are we going to be told that we have one million dollars and don't qualify? |
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admin
Site Admin
Joined: 06 Feb 2004
Posts: 138
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| Posted: Thu Apr 29, 2010 12:23 am Post subject: Re: Health Care Reform Scenario |
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| SciTeacher98 wrote: | One follow up question for any speculation on how the following scenario may be handled.
If my wife and I plan on retiring in 2014 at 57 with one million dollars in our 401k's, and plan on withdrawing the recommended 4% giving us $40,000 annually to live on via the 72t (no other income), will we still qualify for a health insurance subsidy or are we going to be told that we have one million dollars and don't qualify? |
My understanding is that the health insurance subsidy is based on taxable income or AGI not your net worth. So you should be OK if your taxable income is low enough.
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