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ObamaCare Clusterfuck: A worked example of how clawback works when the second spouse gets a job

The Newark Star Ledger:

Imagine this: You’re a hardworking head of a family of four getting by on a mere $40,000 a year. Your employer doesn’t provide health insurance, but you’re required by law to have it by Jan. 1. So you decide to sign up with the insurance exchange created under the Affordable Care Act.

When you get there, you’re pleasantly surprised. It turns out the entire family will receive good [for some definition of "good"] health care coverage and you’ll have to pay only a little more than $150 a month. The government will give you tax credits to pay for the rest.

What a deal! But you’re still not making enough to get by. So your wife takes a job at $30,000 a year. You’ve finally got your heads above water.

Until April 14 of the following year. Then you’re hit with a tax bill for almost $5,000. It turns out those tax credits are greatly reduced for rich people like you. Never mind that you don’t feel all that rich trying to get by on a mere $70,000 in a high-cost state like New Jersey. Uncle Sam still thinks you’re rich.

The author concludes:

That’s the real hidden tax in "Obamacare" — but even the Republicans have yet to figure it out.

I have to run -- and I must admit that I haven't checked these figures on a calculator (even if the calculators are all broken). However, there are times when it seems to me ObamaCare isn't even about health insurance; it's just about getting people into a compliance regime where they're reporting their income in much closer to real time. I mean, that's good data....

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katiebird's picture
Submitted by katiebird on

My heart is filled with hate. Partly because this article is so poorly written I can barely understand it (and I know the subject pretty well) but also because what I DO understand is horrible. I was really hoping they would allow spouses to get subsidies through the exchange if coverage through THEIR spouses employer was more than 9.5%. Like the law is tangled enough. The regulations are even more convoluted. And FUNNY, isn't it, how quick the administration is to cut the tangles for the people who matter (to them)?:

1. You pay a fine if your spouse and kids are uninsured

If you claim dependents on your tax return, you’re responsible for paying the mandate fines if your dependents don’t have health insurance. “A taxpayer is liable for the shared responsibility payment for an individual without minimum essential coverage if the individual is the taxpayer’s dependent,” write the authors of the new regulation, Heather Maloy, Acting Deputy Commissioner for Services and Enrollment at the Treasury Department; and Mark Mazur, Assistant Secretary of the Treasury for Tax Policy.

This provision takes on special importance because of its interaction with Obamacare’s employer mandate. Under the health law, employers with more than 50 full-time-equivalent workers are required to offer health coverage to their employees and employees’ dependents under the age of 26. Employers are not required to offer coverage to employees’ spouses. Hence, a worker who gets coverage through his job will be forced, under the individual mandate, to purchase coverage on his own for his spouse, if he or she doesn’t have other sources of coverage. A worker who doesn’t get coverage through his job will need to purchase coverage not only for himself, but also his dependents.

Alexa's picture
Submitted by Alexa on

Please advise me if I am "misreading" the piece above:

One's eligibility for an "ACA subsidy" depends upon one's income tax filing.

Now, a "legally married" couple can file in at least two ways:

1) Married, Filing "Separately"

2) Married, Filing "Jointly"

From what I've read, this will determine whether one's household income is considered to be $70,000 (married, filing jointly) or $40,000 AND $30,000 (married, filing separately).

IOW, if a legally married couple files "jointly"--their income for subsidy consideration is the combined or "joint" income--or household income, based upon the MAGI of their "joint" or combined filing.

But, if the chose to file "married, filing separately"--their "income" for the purposes of the ACA is considered to be their "individual" income, based on the MAGI of their individual filing.

Am I wrong?

[I've read up on this as much as possible. I've gone ahead and "retired," although I'm just a bit away from collecting ERA Social Secuirty OR my Civil Service retirement.

But, I file with Mr A (married, filing jointly). This means that I can be held responsible for any monies owed. But I'm also claimed on the form as a deduction (not sure if the word is dependent--it may be).]

"For the purpose of the exchange" (if we are ever to participate in it), it is wise for me to do so, since my household income is considered the same as Mr A's.

Which means, that I cannot be thrown into the "Medicaid" bucket.

But, I'm wondering--am I wrong on this?


Alexa's picture
Submitted by Alexa on

but if I am correct in thinking that a couple's filing "category" will affect their Health Exchange status--won't more "legally married" couples soon be figuring if it is beneficial (or not) to "file separately" if one or both spouses are below the approximately $46,000 (or is it $48,000 threshold--I can never remember this figure)?

If this is not the way that it is figured, for "nonworking" spouses filing jointly, then the federal government would have to "foot the bill" for millions more Medicaid recipients.

Does anyone have a phone number (or a link) for a "call center," please?

We've still not heard one iota from Mr A's employer--who was supposed to be "educating us" all summer long (told that in early May) about their decision.

It may be that I should be more worried about this, than any "Grand Bargain," LOL!

Seriously, I should probably check this out, in the event that we (or I) am tossed out of Mr. A's health care plan.

(Since I still have a while to go before I'll collect my retirement--so I'm at the mercy of the federal tax system as a "dependent.")

Submitted by hipparchia on

here are a couple of links from the irs, don't know if you'll find anything helpful or not (lots of reading to wade through):

you might try calling, or visiting in person, your local irs office. i don't know about your local irs office, but the one here had friendly, courteous, helpful staff some years ago, back when i made actual money for a few years and had a more complicated "tax life." i also know, from personal experience, that not all local irs offices are staffed with such courteous and helpful people, so my apologies in advance if you don't have this particular resource available to you.

some irs contact info (the first link on that page has a toll-free number you can call):

Alexa's picture
Submitted by Alexa on

Please check out my comment about my "Exchange consultation."

The young man I spoke to was very pleasant.

But I was left a bit "unsettled," because I did ask him one question which he never answered (because he didn't understand it--from what I could gather).

His attitude was good, though. And it was real quick to get through to him.

But I must say--I cannot imagine having to actually use this venue to sign up for a health insurance plan.

No way.

Alexa's picture
Submitted by Alexa on

Here's the phone number: 1-800-318-2596.

Two things he clarified (for what it's worth):

It IS based upon the way a "legally married" couples federal tax filing "status."

Whew!!! Talk about sweating bullets, LOL! This ol' gal was NOT thrilled by the prospect of having a "MERP" experience any time soon!!!!!

I asked (and it was confirmed): Is a non-working spouse's eligibility (if she files with hubby--hate that term, too) based upon the "MAGI" of their "joint" household income?


And, further, if a couple of working spouses (like the one in the illustration in the article above) filed "married, but filing separately," could they then apply for subsidies in the exchange--which they would both qualify for IF their incomes are treated separately?


Here's the website address:

(Don't have time tonight to check it out, but will.)

BTW--got right through--no "waiting time" at all, LOL!

Why does this not surprise me. ;-)

[If anyone else has different info, please let me know.]

Alexa's picture
Submitted by Alexa on

so I can't check my bookmarks on my older (or "main") laptop.

I bookmarked a lot of ACA stuff, but not everything that I read. (I do that for the Grand Bargain, but I depend on others to research the ACA.)

That "why" I threw the question out to our Corrente "ACA Gurus." ;-)

What the call center guy said was in keeping with what I thought that I remembered about the "non-working spouse's income" being considered (on a joint filing) the same as the "household" income.

If next year's (2014's) ACA premiums/subsidies depend on the most recent IRS filing, it would seem that they would have to accept the filings of many couples who filed "separately" by this year's April 15, 2013 deadline. It was the law, at that time, no?

Now, whether or not this category of federal income tax filing will be eliminated starting Tax Year 2013 (to be filed NLT April 15, 2014)--dunno.

In our case, we filed "jointly."

Actually, I asked the Medicaid program (through a HHS phone number) about 4-5 months ago, how they would figure this (for non-working spouses), and that was the answer they gave.

IOW, a "non-working spouse's eligibility for Medicaid is based upon her "household income," if filing jointly with her spouse. She is not eligible for Medicaid, if her household filing income is above the Medicaid guideline for a family of two.

I was just trying to verify that this evening, now that we are closer to the "roll out" of the ACA.

Or, are you talking about the info on the "dual-income" working spouses info?

That I've never really checked into (it doesn't apply to us), so I don't have a clue, and I'm pretty sure that I wouldn't have "bookmarked" any material regarding this, on the other computer.

May I ask to get your info (link) on the "non-working" spouse, if you have one, please.

I'll take it, and call the so-called "Marketplace Health Exchange" call center again.

I didn't think to ask for substantiation from the rep. Guess that I should have.

And I will, next time. Thanks.

Alexa's picture
Submitted by Alexa on

have not found IRS reg specifically addressing this. On-the-road from next several day, so very limited time to research.

I'm hoping that someone else from Corrente might consider calling the "Health Exchange Marketplace" call center and ask about this. I would be curious to see if they get a very different answer.

The agent asked for my name and phone number. I gave him my real name--but refused to give a phone number. And he accepted that. ;-)

Glancing at the Wikipedia entry (hardly an authority, I realize) here, it makes me of Joint of Separate Filing status regarding being levied the extra Medicare surcharge tax (for higher income individuals)--IOW, the formula differs depending upon whether they file jointly or separately.

It may be a moot point, since MOST couples are better off "filing jointly."

This may not apply to those who do not itemize. We itemize--and we would "lose" big time if we were to file separately, for any reason. (Of course, if this Administration gets its "Grand Bargain," itemizing--except for the very wealthy--will pretty much "go away.")

Since mostly economists (and not health care professionals) wrote the PPACA, I imagine that they considered this, and that the law is constructed so that very few, if any couples, would benefit from changing filing "categories." That's just my supposition, of course.

One problem that I have with the "mandate" is that the subsidies aren't substantial enough in the first place, not to mention that the subsidies can now be eliminated entirely, and the mandate "left standing." (And the door's been opened to "mandating" all kinds of obligations to buy social insurance, that was once paid for by our taxes.)

Whereas, if Medicare For All had been implemented (with its "tab" of about $100 month for most beneficiaries today--those not paying the higher surcharge) as it is today--with no mandate, but a participation rate in the mid-90% range the last time that I saw the figures, the American People would not have been set up to for a potential Royal Scr**wing by fiscal hawks in both parties.

Oh, and the call center dude (I thought) definitely got one question that I asked wrong--I asked if you could simply choose between shopping at the Exchange or accepting your employer's group health insurance plan--he said "Yes."

That's not the way that I've understood that.

Frankly, I believe that he was basically reading from a script, and using a search index to read regulations.

Aside from the fact that the call center agent was pleasant and courteous, I can't conceive of "shopping in the Health Exchange Marketplace."

We will probably consider paying a penalty, if we cannot at least "see" a live person (if Mr A's company doesn't offer a group plan).

Thank goodness Mr A was an insurance professional years ago. At least I know that he will know the "right questions to ask." And even then, there's no guarantee that the "navigators" or call center employers will be able to understand, much less answer them correctly.

Good luck finding a regulation. If you should one, please post a link.

[Sorry this is so disjointed and rambling. Pushed for time.]

Alexa's picture
Submitted by Alexa on

Wow, my apologies for previous comment--talk about "garbled."

Thought I'd add that I checked Hipp's IRS links.

Good information, but unless I overlooked it, didn't see anything to address the question of the of whether our imaginary couple can file separately or jointly, if they are both "working spouses."

Alexa's picture
Submitted by Alexa on

Paul Mulshine/The Star Ledger

About Me:

"I am the sole genuinely conservative columnist at a major American newspaper."

Which is not to say that he is wrong.

I do realize that some of their criticisms are valid. And even though the "mandate" is a conservative policy (Heritage), it was later denounced by the Heritage Foundation (or at least, I heard this on Washington Journal--C-Span).

But he quotes a VERY neoliberal economist (a Democrat) in his article.

And it sounds like that economist is WAY right-wing, actually wanting to do away with Medicare, etc., and go to a "voucher system," for everyone.

Just food for thought . . .

Submitted by lambert on

... so if we ask questions via chat, we can copy the chat transcipt and make it into a post or a comment....

Alexa's picture
Submitted by Alexa on

Was going to try it, but balked at the "Terms Of Service."

Is that statement regarding "tracking, cookies, etc." anything that any of us need to worry about?

They asked for a name and phone number last night, but obviously one can say anything for a name.

And I refused to give the phone number, and they accepted that.

IOW--I'm guessing that I left less of a "footprint," if that makes any difference.

Jeezz! What am I saying--just remembered that all of our calls are "tapped."

Is it prudent to agree to their Terms Of Service (since you probably understand their lingo) to use "Chat."

If you think so, I may give it a shot by the weekend. Mr. A says that I've "run out of time," now.

Alexa's picture
Submitted by Alexa on

Mr A doesn't care for "government intrusion," so he's asked me to hold off contacting the MHE (Marketplace Health Exchange) until we see about his company's group health insurance. Especially since they did say that they would offer "some" insurance next year.

All the more, since my own assessment of last night's "consultation" was that the agent was not very knowledgeable. (Which I base on the fact that he said that anyone who is offered a group health plan from their employer, has "the option" of shopping in the Marketplace Health Exchanges" for a better deal!)

I wish--but that is not what I've read.

So he's probably right that it would be a waste of time.

If I find anymore documented info about the matters we've discussed, I will post it here.

jo6pac's picture
Submitted by jo6pac on

can erase them when you leave the site and yes almost every site uses them that's why your password works until you do that. You'll have to reset all passwords.

ELSEVAR's picture
Submitted by ELSEVAR on

Recommended that you use Firefox browser and the "Selective cookie delete" addon. That addon allows you to set the cookies that you wish to keep active.

For all the cookies you do NOT want to keep and do wish to delete, go to the Tools menu, select Options, select the Privacy tab, and check "clear history when Firefox closes". On that window, you can also check "Accept cookies from sites" and then use the dropdown menu after "Keep until" to select how you want cookies to be handled (e.g. "I close Firefox" or "until they expire", etc).

Note: the warning that a site uses cookies is a courtesy that most decent websites are moving toward, and the warning of cookies from the .gov sites is for people who are leery of cookies in general. In the case of the Soc. Sec. Admin. or the website, the cookies are not for dogging your footsteps, they are just for navigating through the website. For example, this site, Correntewire, uses cookies. Not a problem.

ELSEVAR's picture
Submitted by ELSEVAR on

For clarity, I should add that the first paragraph in my previous post is about the "Selective cookie delete" addon for Firefox. That's one of many marvelous Firefox addons.

My second paragraph was about how to directly tweak Firefox itself to control whether and for how long you want the browser to store cookies. There are also options for allowing or blocking cookies from particular sites. If you need to know how, let me know.

Alexa's picture
Submitted by Alexa on

I will probably "take a pass" on applying the info to calling the MHE call centers. (for the reason cited above)

If I recall correctly, they ask for an email address. And we're certainly not going to furnish that, LOL!

But I sure do appreciate all the "cookie and Firefox browser info."

I will check it out, since I use use Firefox or Comodo IceDragon browsers for "blogging."
(We've been told that "Chrome" is a more secure browser--or at least for Mr A's company confidential accounts, etc. So I often use Chrome for "financial" transactions.)